by Paul McBeth
The National Bank has quietly put its floating mortgage rate up from 6.50 per cent to 7.25 per cent, relinquishing the moral high ground it claimed in October (see earlier story) as the only trading bank to hold its floating rate.
No press release heralded the increase, but bank spokesperson Cynthia Brophy said the changes were advertised in the media. She said the increase reflected the movement in 90-day bank bill rates.
Bank of New Zealand also increased its floating mortgage rate to 7.25 per cent this week, from 6.75 per cent previously, and a similar increase kicks in for WestpacTrust customers next Tuesday.
These increases have opened up an even bigger spread between mortgage lenders. While at least one is offering a floating rate as low as 5.85 per cent, most non-bank lenders are clustered in the 6.35 per cent to 6.50 per cent range (see our rates table).
Since the Reserve Bank increased its Official Cash Rate a fortnight ago, there have been a handful of increases in lenders' floating rates and shorter-term fixed rates such as the one-year term. However, longer-term fixed rates have remained stable, with WestpacTrust even reducing its three and five year rates slightly.