More mortgage pain on the horizon

ASB and ANZ raised their long-term interest rates this week. ASB led, raising its two-year fixed term rate to 6.89%, up 10 basis points, the three-year rate up to 6.69%, four-year rate to 6.59% and five-year rate to 6.49% - all up 20 basis points.

ANZ went further increasing its two-year rate to 6.99%, three-year rate to 6.69%, four-year and five-year rates to 7.09% - all up 20 basis points.

However, SBS Bank has dropped its three-year fixed rate down to 5.99%, slicing off 30 basis points. 

The OCR, swap rates and term deposits influence how banks’ interest rates are set and the ASB says the changing economic environment has driven up banks' borrowing cost.