Bank anticipates pressure for mortgage holders
ANZ has announced increases to its floating and fixed home loan interest rates.
The Reserve Bank of New Zealand hiked the official cash rate by a larger than expected 0.50% in April, from 4.75% to 5.25%.
It follows a 0.25% rise in January and marks the 11th rise since October 2021, when the official cash rate rose from a record low 0.25% to 0.50%.
On Wednesday afternoon, ANZ announced that it would increase interest rates on some deposit and lending products, following the April cash rate rise.
ANZ NZ managing director for personal banking Ben Kelleher (pictured above) confirmed that it’s standard floating home loan rate will increase by 0.40%. Some fixed home loan rates will increase, and business base interest rates will increase by 0.30%.
Kelleher acknowledge that since October 2021, the official cash rate had increased by 5%, and that the bank had taken a “balanced approach” to lending and saving interest rate movements. Changes in each area were “very similar” he said.
According to Statistics NZ figures, 38% of New Zealanders have a home loan and RBNZ data shows that around 90% of mortgage debt is on fixed rates, he said.
“Most of our customers opt for fixed term rates, with only around 10% of debt on a floating rate, many of whom are on the discounted Blueprint to Build floating rate (a discounted rate for those building their own home),” Kelleher said.
“All of this means the financial pressure coming on New Zealanders because of increasing interest rates is occurring gradually over time.”
He acknowledged that high inflation hurts peoples’ spending power and devalues their savings. It increases business costs, pushing up the cost of living, he said.
When reviewing interest rates, the bank considers a range of factors, including the impact on customers, the official cash rate and changes in wholesale interest rates and competitor activity, he said.
The bank expects more people will feel financial pressure as their fixed home loan rolls off.
“Anyone facing difficulty or needing support should get in touch with their bank sooner rather than later,” Kelleher said.
For businesses feeling financial pressure, targeted support options are available, he said.
ANZ’s updated rates table shows a 0.40% increase applied to its floating home loan and flexible home loan (effective April 13 and April 27). The new rates are 8.39% and 8.50% respectively.
Additionally, the bank is increasing rates on fixed rate home loan products. The standard 1-year fixed rate will increase by 0.20% to 7.34% and the standard 2-year fixed rate will increase by 0.14% to 7.19%. Increases also apply to its 6-month and 18-month fixed rates, which will increase by 0.19% and 0.20% to 7.39% and 7.29% respectively. No changes apply to 3, 4 and 5-year fixed rate terms.
Increases to fixed rate products apply from April 13.
The bank has also announced increases to several of its savings products, including a 0.50% increase to its ANZ serious saver rate, along with increases to term investment rates.
