Home Loan Fixed Interest Rates on the Rise

ANZ Bank, the largest lender in the country, by virtue of its ownership of The National Bank, raised home loan fixed interest rates this week. The increases were hefty with 1 year fixed up 0.45% to 5.95%, 18 months fixed up 0.40% to 6.49% and 2 years fixed up 0.44% to 6.99%.

Today the 1 year swap rate is at 3.52% and the 2 year swap rate is at 4.37%.

The 2 year home loan fixed interest rate at 6.99% less the 2 year swap rate of 4.37% leads to a margin of 2.62%. Its from this margin that the bank covers some of its expenses, some of its profits, and reflects the costs of borrowing a proportion of its required funds offshore.

With home loan fixed interest rates on the rise over the past 5 months we have found ourselves making extensive use of fixed interest rate lock agreements.

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