The nation’s largest bank is raising some interest rates on deposits and loans in response to the increase in the Reserve Bank’s cash rate.
ANZ raises floating and flexible home loans, corporate floating rates and overdrafts by a quarter of a percentage point, as does the rise in the RBNZ.
ANZ chief executive for personal banking Ben Kelleher said rates were still relatively low but inflation and expected further Reserve Bank hikes mean retail rates will continue to rise .
“While rising interest rates seem daunting for borrowers who have never experienced it before, it is important to remember that they are still at relatively low levels and that bank affordability ratings take into account that they can change during the life of a loan.”
“The area people need to keep an eye on in the coming months is the impact of rising inflation on their other costs,” Kelleher said.
The RBNZ has indicated that it plans to continue to steadily increase the official exchange rate to fight inflation, with a forecast of around 2.5% by the end of this year, and up to 3, 5% by 2025.
Kelleher said customers who had concerns or needed to talk about their finances should contact the bank.
ANZ’s new floating mortgage rate will be 5.04%, applying from March 1 for new loans and mid-March for existing mortgages, and has also raised some of its deposit rates.
The other major retail banks have floating rates slightly below 5%.
Fixed lending rates, which have risen sharply over the past nine months, are unaffected by the latest hike. They are determined by changes in wholesale interest rates.
Reserve Bank Governor Adrian Orr has warned that rising interest rates and falling house prices could cause some highly indebted households to face negative equity, where their level of debt is greater than the value of their home.