The changes take effect on Monday
Kiwibank has announced that the interest rate it charges on its one-, two-, three, and four-year fixed home loans will increase, effective July 24.
The bank’s one-year special rate will rise from 6.89% to 6.99%, while its standard one-year rate, for people who do not have 20% equity, will rise to 7.99%. In comparison, standard rates at other main banks range from 7.59% to 7.89% for one-year terms.
Kiwibank’s two-year rate will rise by 20 basis points from a special rate of 6.59% to 6.79% and a standard rate of 7.79%, Stuff reported.
Despite the Reserve Bank maintaining its 5.5% OCR at its latest review, interest rates have continued to increase. And while RBNZ has signalled that the current OCR was the peak, it didn’t expect to cut the OCR for some time.
On Monday, ASB economists flagged the risk of a further increase for the rest of the year, until clear data showed that inflation was likely to drop as much as the central bank wanted.
The latest inflation data for the June quarter, set for release this week, is expected to show inflation cooling, but not quickly.
Westpac economists, meanwhile, have predicted a further rise to the OCR next month to 5.75%.
“Since the May statement there wasn’t enough data to significantly shift the Reserve Bank’s strong view for a protracted period of unchanged rates,” they said.
“However, the month ahead will see some key information in the form of the June quarter CPI and labour market report. These will provide more information on the persistence of core inflation pressures and the strength of the labour market, and hence prospects for a fall in GDP during the second half of this year.”
The economists said partial indicators suggested the labour market “has not cracked yet,” increasing the likelihood that the Reserve Bank will have to upgrade its growth forecasts for 2023, Stuff reported.
“This would add some upside risk to the inflation outlook and lengthen the already protracted period over which inflation remains above the target range,” they said. “As a result, we aren’t yet convinced that the door to an August tightening has been closed, although the hurdle to moving through that door remains high.”
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