A challenger bank raises its floating mortgage rate for the second time in a month, continuing a pattern adopted by most banks of small regular increases

SBS Bank is the latest to raise its floating mortgage rate, bumping it up by +14 bps to 5.79%.

This change is effective today (Wednesday) for new customers, but won’t apply for existing customers until April 29, 2017.

It follows the pattern being adopted by banks of making relatively small increases out of the RBNZ OCR change cycle and small enough to avoid major scrutiny.

Along with its early March increase, this change has raised the SBS Bank floating rate by a full +25 bps in the month.

For perspective, here is the recent change history for SBS Bank’s floating rate product:

SBS Bank change history Change Floating
  % %
Start of 2016   5.74
March 10, 2016 (the -25 bps OCT reduction) 0.00 5.74
March 16, 2016 -0.15 5.59
August 16, 2016 (the -25 bps OCR reduction) 0.00 5.59
November 22, 2016 (the -25 bps OCR reduction) 0.00 5.59
January 11, 2017 -0.05 5.54
March 1, 2017 +0.11 5.65
March 28, 2017 +0.14 5.79

In the fifteen months since the start of 2016 the OCR has been reduced by -75 bps. But SBS Bank has actually raised its floating rate over this period by +5 bps.

It is not alone in adopting this pattern, completely separating its floating rate pricing from the OCR changes. Almost all retail banks have all raised their floating rate in 2017, some more than once.

The same increases SBS Bank has announced today relate to its revolving credit product. But at this time it has not announced a similar change to its equity release program, SBS Advance, which remains at a floating 6.85%.

As a result of today’s change, SBS Bank is now pricing its floating rate at the same level as adopted by ANZ. It has relinquished the -15 bps advantage it had of the nation’s largest mortgage lender at the start of March.

Here is a snapshot of the current floating rates by the key retail banks and their recent change history:

below 80% LVR as at
Dec 31, 16
as at
Jan 31, 17
as at
Feb 28, 17
at March 31
5.59 5.69 5.69 5.79
ASB 5.65 5.80 5.80 5.80
5.64 5.79 5.79 5.90
Kiwibank 5.25 5.40 5.40 5.55
Westpac 5.65 5.65 5.65 5.75
5.55 5.55 5.55 5.65
HSBC 5.59 5.59 5.59 5.59
HSBC 5.59 5.54 5.54 5.79
5.54 5.54 5.54 5.65

SBS Bank has not made term deposit rate changes at this time; its last term deposit rate changes involved an increase to its 18 month and two year term deposit rates on Monday, at the same time it ended its 3.80% six month ‘special’.

All current mortgage rates are here.

All current term deposit rates are here and here.