ASB joins rivals in lifting fixed home loan rates

ASB has become the latest of New Zealand's big four banks to lift its fixed home loan rates, following similar moves from ANZ, Westpac, and BNZ within a matter of weeks.

Renewed volatility in the Middle East has contributed to the rise in wholesale funding costs driving the sector-wide increases.

ASB has increased fixed rates across its six-month to three-year terms by between 10 and 26 basis points, while leaving four- and five-year rates unchanged. The steepest rise came on the 18-month term, up 26 basis points to 5.35 per cent, while the one-year rate climbed 24 basis points to 4.99% and the two-year rate rose 20 basis points to 5.45%.

ASB executive general manager personal banking Adam Boyd said the changes reflect ongoing pressure in wholesale funding markets.

"We're continuing to see volatility in wholesale interest rates, which have climbed over the past month. This has a direct bearing on the rates we offer on lending and deposits, in line with what is happening in markets around the world," Boyd said.

Term deposit rates edge higher too

Alongside the lending changes, ASB has lifted a handful of term deposit rates, with increases concentrated in the six-month to two-year terms. The six-month rate rose 10 basis points to 3.55%, the nine-month rate increased 15 basis points to 3.7%, the 18-month rate rose 15 basis points to 4.15%, and the 24-month rate climbed 20 basis points to 4.2%. Shorter and longer terms, including the one-year and three-year-plus rates, were left unchanged.

Boyd framed the deposit increases as a silver lining for savers amid the broader rate rises.

"These changes mean we're able to support savers with stronger term deposit rates," he said.