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.
Get in touch for further information.