Sovereign Raises Fixed Interest Rates Across The Board

In somewhat of a surprise move ASB Bank has today tested the home loan fixed interest rate market through its subsidiary Sovereign by raising home loan fixed interest rates across the board.

1 year fixed goes from 5.95% to 6.15%. 18 months fixed goes up a whopping 40 basis points from 6% to 6.40%. And even the 5 year rate gets a tune up from 7.60% to 7.75%

Given last weeks OCR announcement, rises in short term home loan interest rates would not have been particularly surprising. Rises in them all, from 6 months through to 5 years fixed, is however and It shall be interesting to see if the major lenders follow.

UPDATE: 09/08/2011

Having been left out in the breeze by the rest of the market, which did not follow ASB and Sovereign in raising home loan fixed interest rates, a u-turn has occurred and notification of home loan fixed interest rate decreases is just through. 18 months fixed is cut from 6.40% down to 6.10% and the very surprising rise in the 5 year rate from last week to 7.75% is now trimmed down to 7.40%, below where it was before last weeks rise.

With global financial markets getting spanked the past few days on growth concerns we hold no inspiration to move from a floating interest rate.