ASB to hike floating mortgage rates after OCR rise

ASB have raised their rates on floating home loans, some savings accounts and term deposits.

The move comes after the reserve bank raised the official cash rate to 4.25% last week.

Some savings account rates will move up by 0.75% from January 1.

Its floating home loan is going from 7.35% to 7.99%, while its Orbit and Back My Build loans are also going up.

ASB's Adam Boyd says they know the increase will affect mortgage holders.

“We’re very aware of the effect of higher mortgage rates on many household budgets."

“We’ve also chosen not to pass through the full impact of the OCR increase for Back My Build loans. These customers are constructing new homes and have experienced rapid increases in building costs."

Thirty-six month term deposits have gone up to 5.30% and 9 month deposits to 4.80%.

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Finance Minister Grant Robertson and the Reserve Bank have both said New Zealand is likely to enter a recession.