Westpac and BNZ follow with lockdown rate hikes

Westpac and BNZ are the latest big banks to make significant mortgage rate increases, hiking prices by up to 30 basis points.

They follow the lead of ASB, which raised fixed mortgage rates by up to 30 basis points last week.

Westpac has increased pricing on one year, 18 month and two year mortgage rates. 

One year rates increase by 30 basis points, with Westpac's one year carded rate at 3.45% and one year special at 2.85%. 

The bank's 18 month rates increase by 24 basis points, carded at 3.69% and its special at 3.09%. 

Two year rates rise by 30 basis points, with Westpac's carded rate at 3.85% and special rate coming in at 3.25%. 

Advisers expressed disappointment at the rising rates as Auckland remains under level four lockdown.

"Im wondering whether, even though they have funding from the Government for the build loans, they are funding some of it from these increases," said one adviser.

"It seems a harsh increase in advance of the OCR in early October. Especially given their recent profit announcement as well."

BNZ's new rates include a one-year "classic" loan at 2.85% and a two-year classic loan at 3.25%.

The sweeping big bank rate increases come as lenders move ahead of the next Reserve Bank official cash rate meeting in early October. The central bank is poised to raise rates for the first time since 2014, despite the nation returning to Covid alert level restrictions.

Wholesale markets currently give a 40% probability of the Reserve Bank hiking rates by 50 basis points next month, with a 100% chance of a 25 basis point increase.

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