As expected, the big banks are starting to drop their rates further to reach below 3%, and today ASB announced its two-year fixed rate of 2.99% while Kiwibank introduced a one-year fixed rate of 2.99%.

Newspapers being printed on a commercial printer

Big banks join the rate war, dropping below 3% 

Mortgage interest rates have now risen by between 1.3% and 1.8% from where they were less than six months ago as banks have reacted to sharp increases in their cost of funds. 

Fixed rate hikes reflect market expectations

The Reserve Bank has so far raised its official cash rate by a small 0.25% yet bank fixed mortgage rates across the 1–5-year terms have risen by between 1% and 1.5%. Why such disparate changes?

High inflation and low unemployment, mean high interest rates

For quite a few months now my central theme with regard to interest rates has been fairly clear. Inflation risks are rising, the Reserve Bank will tighten, and chances are they will tighten by considerably more than people are comfortably thinking.

Results: Banks

Fixed rate hikes reflect market expectations

High inflation and low unemployment, mean high interest rates

Soaring inflation raises mortgage rate risks

Big banks join the rate war, dropping below 3%