A major mortgage lender sets higher rates to start 2017, responding to higher wholesale rates, and hoping its rivals follow soon

ASB has raised all its fixed rates sharply in the first mortgage rate move of 2017.

The increases range from +10 bps to +30 bps, and are effective today (Friday).

These are changes that push ASB to a position of offering the highest rates for any fixed term, except for 18 months where ANZ has that distinction.

Their six month rate has been raised by +10 bps to 4.85%.

Their 1 year fixed rate has been raised by +20 bps to 4.49%.

The rate for 18 months fixed is also up +20 bps, now at 4.65%.

For two years fixed, the new rate is +30 bps higher than previously and now at 4.79%.

A similar +30 bps increase applies for all terms of 3, 4 and 5 years fixed and the new rates are 5.09%, 5.49% and 5.69% respectively.

All the above rates quoted are their ‘special’ rates, requiring at least 20% equity and other conditions.

Higher rates apply for ‘standard’ terms, generally +40 bps above the ‘special’ rates.

These increases come as the steam seems to be going out of the wholesale swap rates. These were lower today, following even sharper falls on Wednesday and Thursday.

But prior to the end of 2016, the wholesale rises had been sharp and relentless, so higher mortgages rates are not surprising.

ASB won’t be able to stay as the only bank with such high rates – they will be counting on others following. 2017 start with a number of other institutions raising such rates as well, endeavouring to get them in place before most of us get back from holiday.

Today’s adjustments doesn’t change who has the leading carded rates for mortgage borrowers. HSBC Premier sill leads for a one year term, SBS Bank now has the leading rates for 2 years, and TSB Bank has the market-leading offers for all terms longer. Kiwibank also has the market-leading two year rate.

See all banks’ carded, or advertised, home loan rates here.

A snapshot from the key retail banks is:

below 80% LVR  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % %
4.25 4.99 4.59 5.29 5.45 5.60
ASB 4.49 4.65 4.79 5.09 5.49 5.69
4.39 4.99 4.59 4.79 5.45 5.59
Kiwibank 4.24   4.39 4.75 5.30 5.40
Westpac 4.25 4.95 4.54 4.79 5.49 5.39
             
4.39 4.55 4.55 4.89 5.39 5.55
HSBC 4.19 4.29 4.39 4.69 5.09 5.29
HSBC 4.29 4.45 4.39 4.75 5.29 5.45
4.25 4.45 4.49 4.59 4.89 4.99

In addition to the above table, BNZ has a fixed seven year rate of 5.99%. This has not changed today.

TSB Bank offers a fixed ten year rate at 5.75%.