Wednesday's Reserve Bank 50 basis points Official Cash Rate (OCR) hike to 2.00% has now brought a first, slow full response - from Kiwibank.
The unexpected hawkish tone from the regulator has had banks reassessing how they will react across all retail rate changes that are necessary (for floating and fixed home loan rates, and for term deposit rate offers).
Wholesale swap rates rose sharply at the one and two year end of this market in the two days since the change. But these will affect fixed rate pricing rather than floating rates.
Ninety day bank bill rates rose from 2.23% a week ago to 2.40% on Thursday. They will probably be higher today, possibly to 2.45%, when the trading ends later. That is a +22 bps rise in five days, taking the rise from just after the previous OCR hike to +54 bps. Since early October 2021 when this rate hiking cycle started, the cumulative rise has been +190 bps and more has been priced in that the +175 bps delivered so far in OCR increases.
Kiwibank's latest floating rate hike Friday - the full +50 bps - also came with rises in some key savings rates. Their online call account has been raised +30 bps, the 30 day Notice Saver by +40 bps, and the 90 day Notice Saver account by +35 bps.
Update: ANZ is raising its home loan floating rate by +40 bps, and its business floating and business overdraft base rates will also go up +50 bps. At this time, ANZ have not advised any fixed rate changes. But they too are raising some key savings account rates. For Serious Saver, ANZ’s largest savings product, the total interest rate will increase +40 bps to 1.50%.
Updates: BNZ has raised its home loan floating rate by +39 bps to 5.94%, the same level as ANZ. Westpac is lining up at that same level too. ASB's website is showing their new floating rate now, a +50 bps rise.
Here is the running tally of bank changes to floating rates which we will update as each announcement is received.
|Floating mortgage rates||Prior rate||change||New rate||Existing customers,|
|RBNZ OCR||1.50||+50||2.00||25 May 2022|
|ANZ||5.54||+40||5.94||16 June 2022|
|ASB||5.35||+50||5.85||9 June 2022|
|BNZ||5.55||+39||5.94||17 June 2022|
|Kiwibank||5.00||+50||5.50||13 June 2022|
|Westpac||5.54||+40||5.94||17 June 2022|
|Cooperative Bank||5.45||+40||5.85||20 June 2022|
|Bank of China||4.45||+50||4.95|
|China Construction Bank||5.00|
|Heartland Bank||4.00||-25||3.75||3 June 2022|
|SBS Bank||5.29||+50||5.79||3 July 2022|
We will separately report the fixed rate increases when some arrive.