Westpac increases mortgage rates during lockdown

Banks across New Zealand have updated their mortgage rates during the COVID-19 lockdown, with Westpac being the latest to announce its rate changes.

Last week, ASB increased its fixed home loan rates for three-year, four-year, and five-year terms.

Now, Westpac has confirmed a +10 bps rise for its 18-month rate to 2.85%, the highest of any bank on a “special” basis for that fixed term. It has also increased its two-year rate by +6 bps to 2.95%, matching other major Australian banks, according to Interest.co.nz.

In addition, the major bank added +10% to its three-year rate to 3.49%, less than ASB’s rate but more than the other main banks. Meanwhile, its +50 bps rise for four and five years fixed is the same as the new ASB rates, less than ANZ, but more than BNZ or Kiwibank.

The bank has also raised term deposit rates from one year to five years, with the one-year rate at 1.30% and the five-year rate at 2.30%. Both rates are now the highest of any main bank at the five-year end, according to Interest.co.nz.

Read more: Reserve Bank releases latest data on mortgage commitments

The latest changes in mortgage rates take into account the Reserve Bank of New Zealand’s latest data, revealing that total monthly new mortgage commitments in the country hit $8.8 billion in July 2021, up 3.4% from the previous month and a new high for the month of July.

The central bank noted that new mortgage commitments to investors hit $1.5 billion in July 2021, up from $1.4 billion last month and an annual increase of 19.4%. Meanwhile, new mortgage commitments to other owner-occupiers rose from $5.4 billion in June to $5.7 billion in July, increasing 51.5% over the year.

Investors accounted for 16.7% of new mortgage commitments, down from a share of 16.8% in the previous month. Meanwhile, first-home buyers (FHBs) had a share of 18.2% in July 2021, down from 19.3% in the previous month. By contrast, other owner-occupiers rose from 62.9% to 64.1% during the same period.