Photo: RNZ / Nate McKinnon
New Zealand's biggest bank is urging consumers to ask for help sooner than later as interest rates move up in line with last week's hike in the Reserve Bank's official cash rate (OCR).
The ANZ Bank said it would raise interest rates on a number of products to match the RBNZ's 0.5 percentage point rate increase in the OCR, which had taken the rate to its highest level in seven years to 3.5 percent.
ANZ economists expected the RBNZ to raise the OCR by another 50 basis points (bp) at the November Monetary Policy Statement, with 25bp moves in each of the first three meetings of 2023, to a peak rate of 4.75 percent, which was the high end of market expectations.
"With increasing global economic uncertainty and higher inflation, we know people are having to make some tough choices about their spending," ANZ NZ managing director for personal banking Ben Kelleher said, adding the bank's rates were continuing to be reviewed in response to local and global market conditions.
He said the higher rates had already driven down demand for loans by about a third, compared with a couple of years ago, with home loan applicants stress tested at interest rates around 8 percent.
"People shouldn't be nervous about talking to their bank, we're here to support customers with the various options available to them," Kelleher said, adding the tougher interest environment could persist for a couple of years, although there had already been some signs of a slight easing in the wholesale market.
He encouraged anyone who had concerns or wanted to take the opportunity to talk about their finances to get in touch with the bank early.
"However, we can see from our customer data that many are in good shape to get through this. Where possible, people are choosing to stay on top of their debt and save money where they can."
The ANZ's rate increases would affect floating home loan interest rates, but not fixed mortgage rates, while business floating and overdraft rates would also see the annual rate increase by 50 bp.
Savers could see up to a 0.4 percentage point increase to 2.7 percent, depending on the type of account.
