an additional $1824 per year ($152 per month) under the new two-year rate.
According to the bank’s general manager of retail banking, Craig Sims, this increase in interest rates can be attributed to the robust economy of the pacific island.
“While interest rates are now increasing, they remain at historically low levels,” he 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 Auckland-based bank announced the changes ahead of the Reserve Bank’s OCR announcement. While most banks have projected the rate to increase by November, nevertheless, in its monetary policy review issued on Wednesday, the central bank held Official Cash Rate at the current record low of 0.25 per cent.
While the new mortgage rates launched by ASB comes as bad new to homeowners, however, Sims requested customers to talk to the bank in order to identify what is currently being offered.
“We’re committed to offering innovative home lending products such as our 1.79 per cent variable Back My Build loan for customers building a new home, and helping customers budget with the comprehensive calculators and tools available on our website,” the bank’s general manager said. “Whatever the market conditions, our focus is squarely on offering customers market-leading home lending products and leading customer experiences.”
