Westpac is lifting its floating lending and savings rates by 0.25% after the official cash rate was hiked yesterday.
The changes take effect from Monday for new customers and next Thursday for existing customers, with variable home and business loan rates all rising 0.25% per annum.
The move follows the Reserve Bank's decision to lift the OCR to 2.50% – its first hike in more than three years, and the first increase since May 2023.
Westpac NZ managing director of product, sustainability and marketing Sarah Hearn said the bank would keep supporting customers on both sides of the ledger.
"We'll continue working hard to support both borrowers and savers through an interest rate tightening cycle," Hearn said in a media release.
"The large majority of our home lending is on fixed terms, and there are no changes to any of our fixed rates today."
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Fixed home loan rates were staying unchanged.
Hearn said a rising OCR would likely mean good news for savers, adding the bank had held its saver rates unchanged over the past year even as the rate fell.
She said customers had largely coped well with recent economic uncertainty, but encouraged anyone worried about their finances to talk to the bank.
Westpac's key variable savings product, bonus saver, will also climb 0.25% per annum from Monday, lifting its total potential rate of return to 1.50%.
The bank's simple saver rises 0.15% to 0.20%, while its notice saver holds at 3.00%.
Among the variable home loan changes, Choices Floating and Choices Offset both move to 6.14% per annum, and Choices Everyday rises to 6.24%.
Rates increases 'may as well start now' – economist
Yesterday, the Reserve Bank's monetary policy committee signalled more OCR increases to come, although it described the timing of future rises as "highly uncertain".
Cotality chief property economist Kelvin Davidson said the decision was not universally expected, but appeared to reflect a view that increases towards a more neutral level of around 3% were inevitable.
"They may as well start now," Davidson said, "even though fuel prices have eased and second-round inflation risks have probably receded too."
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"A continued economic recovery in the coming months, even if [or] when the OCR rises again, would tend to bolster sales volumes and property values too.
"But a fresh [property] boom seems very unlikely. Indeed, listings remain elevated, giving buyers the balance of power on pricing. The election – and potential tax changes – appears to be dampening investors’ moods too.
"Meanwhile, a mindset shift also seems to be underway, with a lot of questions being asked about long-run capital growth prospects in a world where new housing supply looks to have taken a permanent step higher."
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