Westpac NZ is making changes to its advertised Choices fixed term home loan rates, after significant increases in wholesale interest rates following late November's OCR announcement.
Effective Wednesday, Westpac is cutting its 6-month advertised special rate to 4.69% p.a. - the lowest of the five biggest banks as of 3pm Tuesday - and lifting its rates on the longer 2-to-5-year terms by 0.30%.
At the same time, Westpac is supporting savers with broadly similar increases to its longer-term deposit rates.
As noted by a number of commentators, including Westpac's Economics team, funding costs for fixed home loans have risen sharply since the last OCR cut.
Westpac NZ Managing Director of Product, Sustainability and Marketing, Sarah Hearn, says while it is raising longer-term rates, Westpac is holding back some of those cost increases for customers.
"We were the first of the five biggest banks to cut our variable lending rates following the official cash rate cut two weeks ago," Ms Hearn says.
"Conversely, fixed rates are mainly driven by movements in wholesale interest rates rather than the OCR. While the OCR has fallen, wholesale rates have lifted materially, by more than 0.4% on longer terms since the day before the OCR announcement.
"With today's changes, we're holding back some of the increase in wholesale borrowing costs to customers, while also offering great value for those looking for short-term flexibility with our new 6-month advertised special rate.
"We also know savings customers are watching falling interest rates closely, and we're moving to support them by raising all term deposit rates one year or longer. We've held our variable Notice Saver rate unchanged at 3.00% p.a. through the last three OCR cuts, which is a good option for those who would rather lock in their money for a shorter time frame.
"Whether you're a borrower or a saver, we encourage you to come and talk to us, or a trusted advisor, on what approach may work best for you through 2026 and beyond."
