The ANZ National Bank has bumped up its fixed interest rates for two-, three- and four-year mortgages and business loans.
Competition for savings was putting upward pressure on term lending rates, the bank said in its Market Focus report today.
The three-year rate has risen from 5.99 percent to 6.15 percent; the four-year rate from 6.40 percent to 6.55 percent; and the five-year rate from 6.5 percent to 6.75 percent.
The rises bring its longer period lending rates generally into line with other lenders.
ANZ National said this morning the Reserve Bank of New Zealand would be mindful of how low it could take the official cash rate (OCR -- currently at 3 percent, down from 8.25 percent in July last year), and maintain competitiveness.
The next natural step would be to signal the OCR would stay low for an extended period.
"Hence, we see limited scope for rates to sell off, and expect the two-year swap yield to range trade between 3.15 to 3.55 percent.
"This strategy is becoming even more necessary at present given Widespread competition domestically for savings (deposits), which is putting upward pressure on term lending rates."