New Zealand's largest bank has raised its home loan rates ahead of the Reserve Bank's OCR review next month.
ANZ announced yesterday afternoon it would raise mortgage rates by as much as 26 basis points. The new rates are effective from today.
The new one-year fixed rate will be 7.99%, up 14 basis points, while the special rate will be 7.39%.
The steepest change would be for six-month terms with a 26 basis point rise to 7.95%.
ANZ's changes come alongside lifts to some term deposit rates with a one-year deposit now offering the most attractive rate — 6.1% per annum.
A spokesperson for the bank said interest rates would "continue to be reviewed in response to international and local market conditions".
"When reviewing interest rates we consider a range of factors, including the impact on customers, the underlying cost of funds (including wholesale rate movements) and competitor activity," an ANZ spokesperson said.
BNZ's home loan rates will also increase today, while Westpac is increasing its term deposit rates.
The Reserve Bank will review the official cash rate next month.
Experts respond
Mortgage advisor Gareth Veale told Breakfast the increase was small compared to the "massive" increases in the recent past.
"It's really, really rough for first home buyers — but, the latest increases, not so much," he said. "We've gone through the pain hopefully."
Veale said banks' margins are being tested at the moment and "their ability to be able to lend in the future will be tested if they don't retain margins. So, Veale said he'd advise people to shop around.
"Make sure that you are really negotiating with your bank," he said.
"And if you can't do that on your own behalf, use a mortgage broker."
First Home Buyers Club spokesperson Lesley Harris said: "It's certainly very, very tough times.
"So obviously, interest rates going up is not great for people trying to get into the property market."
Harris said it's a "minefield" for people to get into the market right now.
She called for banks to offer more specials for first home buyers, and urged buyers to do their homework.
"We're starting to see a few things happen but we'd like to see a broader strategy," Harris said. "This is a New Zealand problem.
"It's not just a first home buyer problem. It's our children, it impacts people's retirement... It's a big problem."
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