Kiwibank joins others in hiking lending rates

Thursday 6 May 2004

State-owned Kiwibank today joined other banks in hiking its floating mortgage rate.

By The Landlord

Kiwibank lifted its rate from 6.95 per cent to 7.2 per cent, maintaining its margin over other banks.

Yesterday, ASB and Westpac raised their rates to 7.75 per cent from 7.5 per cent.

Westpac said the move, in response to last week's move by the Reserve Bank to hike the Official Cash Rate to 5.5 per cent, added $24.50 to a monthly payment on a $150,000 mortgage on a 25 year term.

Some economists are forecasting another rate rise in June which would push mortgage rates to 8 per cent. With an annual inflation rate of just 1.5 per cent, New Zealand has among the highest real interest rates in the Western world.

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