ANZ hikes interest rates again

The country’s largest bank, ANZ, is lifting its mortgage and deposit rates again.

The changes will see borrowers who fix their mortgage for a year charged the highest rates of interest.

Regular borrowers will be charged 7.99%, while “special” borrowers, who have at least 20% equity and get their salaries paid into an ANZ account, will be charged 7.39%.

ANZ’s six-month rates are its next highest, at 7.95% and 7.35%, depending on the status of the borrower.

On Wednesday, ANZ’s six-month mortgage rates will rise by 26 points, its four and five-year rates will rise by 25 points, and its three-year rates by 20 points.

Meanwhile the bank is hiking its one-year, 18-month, and two-year rates by between 10 and 14 points.

A spokesperson for the bank said the changes reflect recent increases in wholesale swap rates.

While swap rates rose through September, they’ve since dropped back.

Nonetheless, an ANZ spokesperson went on to explain, “Interest rates will 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.”

ANZ’s interest rate changes put it broadly in line with ASB’s recent hikes.

While the Reserve Bank has kept the Official Cash Rate (OCR) at 5.50% since May, and has suggested it’s unlikely it will lift the rate again in this tightening cycle, retail banks have still been lifting their mortgage and term deposit rates.

As per ANZ’s comment, they’re pointing to global financial markets expecting inflation remaining sticky and therefore interest rates remaining high.

Turning to term deposits and PIE funds, ANZ is lifting a range of its 180-day to two-year rates, by between 15 and 30 points, to 6.00%.

Its most attractive offering is 6.10% for one-year deposits.

The bank is also hiking its three to five-year rates by 25 points to 5.50 and 5.45%.

While inflation is abating in New Zealand (the annual rate fell to 5.6% in the September quarter), some economists worry that getting it all the way back down to the Reserve Bank’s 1 to 3% target range might be a challenge.