This after the central bank raised the OCR to 2.5% to curb inflation
Bank of New Zealand and ASB have both signalled an increase in the cost of their variable rate home loans.
The announcements follow the Reserve Bank’s decision to raise the OCR from 2% to 2.5% in a bid to combat rampant inflation.
Read more: Interest rates are on the move again
ASB said it would lift the interest rate it charged on its ordinary variable rate loan from 5.85% to 6.35% on July 27, as well as raising the cost of its revolving credit Orbit home loan rate from 5.95% to 6.45%, Stuff reported.
BNZ, meanwhile, said it would increase the interest rate it charged on its variable rate home loan for people with 20% or more equity in their homes to 6.39% on Aug. 1. BNZ’s current variable rate sits at 5.94%, though people with lower levels of equity in their homes were charged a “low equity” premium of between 0.35 and 1.15 basis points on top.
Read next: RBNZ rate rise reaction – there's more to come
There’s no news of an interest rate hike on any of BNZ’s fixed rate loans, or its credit card, or overdraft rates, as of the time of writing.
The recent OCR move was the third time this year that the Reserve Bank has lifted the cash rate by 50 basis points, with the central bank’s current forecasts projecting a likely peak of 4% during the second half of next year.
The central bank confirmed that it was committed “to ensure consumer price inflation returns to within the 1% to 3% target range,” with some bank economists predicting inflation to peak at just over 7%, Stuff reported.
