ASB is the latest bank to raise floating mortgage rates, following ANZ and Westpac. Other banks will follow soon.
Here is an update of the changes so far. This is just a summary; the full tables of all rates and all institutions is here.
| Floating rate | Prior | change | New | Effective date for existing borrowers |
| % | bps | % | ||
| ANZ | 4.79 | +25 | 5.04 | 15 March |
| ASB | 4.60 | +25 | 4.85 | 9 March |
| BNZ | 4.95 | +20 | 5.15 | 17 March |
| Kiwibank | 4.25 | +25 | 4.50 | 14 March |
| Westpac | 5.09 | +15 | 5.24 | 15 March |
| Cooperative Bank | 4.75 | +20 | 4.95 | 18 March |
| Heartland Bank | 3.75 | |||
| HSBC | 4.59 | |||
| SBS Bank | 4.79 | |||
| TSB | 4.79 |
We will update this table as other banks announce their changes.
At the same time all the banks who have changed floating rates have also raised some savings account rates, usually bonus saver accounts.
6 Comments
With all the talk of the rising OCR impacting on borrowers...
The margin Banks are actually making on floating mortgage rates above the OCR pre GFC days was around 2%.... then it mushroomed to 4% in 2008 (apparently to cover expected losses which were cushioned courtesy of falling interest rates). Their floating rate margin has remained around 4% ever since...
RBNZ say "... only 11% of total loans are on floating rates... " but is that a valid 'excuse' for an excessive 4% margin delivering profit cream on $27+Billion of mortgages? (thats an extra $540M profits compared to charging the standard 2% margin).
RBNZ also pointed out the banks margins are LOWER now than they were pre 2008... and RBNZ pointed to the big banks re Net Interest margins being around 2% however it's easy to 'expense' the gross margin down to what looks like an acceptable level... (ie increase quasi-costs)
I guess a 4% margin on floating loans with a base rate of 1% is not deemed usury...
Banks do appear to have lower fixed rate margins (than the floating margin) however I think these also appear to have had some margin increases since the GFC.
Can anyone explain WHY the margin for Banks has risen so much since 2008?
It's not like they have had to cover significant losses since then.
Also interesting to note since the pandemic they have not reduced their floating rate margin an iota.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.