A third bank raised its variable mortgage rates following yesterday’s increase in the official exchange rate.

ASB will increase its floating mortgage rate from 4.85% to 5.35% and its orbit rate from 4.95% to 5.45%.

His move follows ANZ and BNZ both raising their variable rates yesterday shortly after the Reserve Bank raised the OCR from 1% to 1.5%.

ANZ announced that its floating and flexible interest rates on home loans would increase by 0.5% to 5.54% and 5.65% (pa) respectively.

While its floating base and overdraft rates for businesses would also increase by 0.5%.

It also announced increases in its fixed mortgage rates between 20 and 40 basis points.

Ben Kelleher, ANZ’s chief executive for personal banking, said yesterday OCR was just one of many factors, including wholesale interest rates, that determined bank lending rates.

“The global economic response to Covid-19 and geopolitical issues, such as the war in Ukraine, are pushing inflation to levels not seen in decades.”

“Along with the OCR decision…we’ve seen significant increases in wholesale interest rates in recent weeks. This is also impacting our fixed interest rates for home loans,” Kelleher said.

BNZ said its variable rates would drop to 5.55% for existing and new customers from May 4.

The new SBA variable rates take effect April 27 for new loans and May 4 for existing loans.

ASB has also raised interest rates on some of its savings accounts.

Maximum interest rates on ASB Savings Plus and Headstart deposit accounts will increase from 0.75% to 1.05%.

Headstart savings rates start from April 27.

Kelvin Davidson, chief property economist at CoreLogic NZ, said the Reserve Bank had opted for the “shock factor” of a 50 basis point hike and that short-term fixed mortgage rates could rise above 6% as a result. .

“For the housing market, the implications are clear – even though mortgage rates have already risen in recent weeks, this process is not yet complete. In the 4-5% range, and it seems fair to suggest that this could end up in the 5-6% range over the next few months, maybe a little higher.”

Davidson said that while many borrowers were still sitting on their lower rates agreed last year or earlier, around 50% of existing loans in New Zealand were due for renewal over the next 12 months, with a sharp increase in Imminent refunds.