The worm could be turning on historically low mortgage rates, with ASB this morning announcing an increase to its fixed term offerings.
Mortgage loans periods from six months to five years are all increasing by 0.30 or 0.36 per cent.
Its floating rates remain the same for the time being.
“The New Zealand economy is proving robust, and the economic outlook has improved. While interest rates are now increasing, they remain at historically low levels," Craig Sims ASB’s executive general manager of retail banking said.
“We’re mindful that some first home buyers in particular have only ever experienced the current low-rate environment. When we assess a home loan application we use a ‘test rate’ that is substantially higher than current mortgage rates to give customers the confidence they can continue to make payments if rates increase."
The bank also raised its one-year term deposit rate to one per cent.
Earlier this month, ASB's senior economist Chris Tennent-Brown said borrowers should brace themselves for higher mortgage rates.
“Our forecasts suggest more increases are coming for mortgage rates over the rest of the year,” he told Stuff.
“ASB now expects the Reserve Bank of New Zealand to start raising the Official Cash Rate from its record-low setting of 0.25 per cent in November 2021.”
The Reserve Bank (RBNZ) held the official cash rate (OCR) at a record low 0.25 percent this afternoon, and said it will keep the cheap money lending scheme for banks.