The biggest increase was for the three-year term deposit, which saw an increase of 0.3 per cent from 1.4 per cent to 1.7 per cent. While the rising rates will come as bad news to homeowners, the flip side is that those with savings in the bank will be given a boost on their term deposits.ĪSB has increased its six-month term deposit interest rate by 0.2 per cent, with the rate rising from 0.8 per cent to 1 per cent. '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.' 'We're mindful that some first home buyers, in particular, have only ever experienced the current low-rate environment.

'While interest rates are now increasing, they remain at historically low levels,' Sims said. This shift from ASB also comes shortly before the release of inflation data, expected to show New Zealand costs rising at as much as 3 per cent - the highest figure in a decade.ĪSB general manager of retail banking Craig Sims attributed the increase in interest rates to the robust New Zealand economy. On Wednesday, the Reserve Bank left the OCR unchanged at 0.25% but said it would reduce economic stimulus by winding up its programme of bond buying - sometimes described as printing money. Most banks have forecast the OCR rate to lift from its current record low 0.25 per cent by November this year. These changes preceded the Reserve Bank's announcement on the Official Cash Rate.

Meanwhile, the five-year rate has increased by 0.3 per cent, lifting from 3.69 per cent to 3.99 per cent. The two-year rate has gone from 2.59 per cent to 2.95 per cent as part of the update. The bank lifted its fixed one-year rate by 0.36 per cent, up 2.19 per cent to 2.55 per cent per annum. Photo: NZ Herald ASB is the first of the major banks in New Zealand to increase its mortgage and term deposit rates.

Kiwi bank term deposit rates