Mortgage lending rates are on the move again, but not in the way earlier predicted.
ANZ, Westpac, Kiwibank and TSB have all increased their floating, or variable, mortgage rates following a similar move last week by the ASB.
The moves are said to be in response to the Reserve Bank increasing its official cash rate to 3% on July 29.
Earlier, it was thought that short-term interest rates - and floating mortgage rates - would remain low as fixed terms increased.
Retail banks are under pressure to source a percentage of their lending from domestic investors as part of a Reserve Bank funding requirement.
Craigs Investment Partners broker Chris Timms said the banks were still competing and he was aware of five-year deposit rates of 7% being offered.
"There is a lot of pressure from banks for buying clients' funds. If you shop around, there are reasonably attractive term deposit rates on offer as banks attempt to lure in customers."
The call rates were subject to movements in the official cash rate, but there were two reasons for the slight fall in fixed lending rates, he said.
Forecasts for long-term interest rates were not as high, reflecting the fact the economic recovery was slower than predicted, but banks were also trying to attract customers to lock in longer term mortgages.
"If they have money in five-year term deposits, they might want to encourage people to lock in loans on the same rate. To do that, they need to make the rates attractive," Mr Timms said.
ANZ is raising its variable mortgage rate while cutting its 18-month, two-year and three-year fixed rates.
The variable and flexi-rate will rise to 6.20% from 5.95%.
The rate for mortgages fixed for six months rises to 6.35% from 6.10%.
But the fixed 18-month rate falls four basis points to 6.65% and the two-year rate falls to 6.85%.
The three-year interest rate falls to 7.2%.
The bank did not change its one-year fixed rate of 6.45%.
It introduced a 30-month special rate of 6.99%.
The four- and five-year rates are also unchanged.
Westpac lifted its floating mortgage rate 0.25% to 6.1% and lifted its six-month rate 0.15% to 6.25%.
It cut its two-year rate 0.14% to 6.85% and its 18-month rate to 6.69%.
Kiwibank increased its floating rate 0.25% to 6.15% and reduced its two-year rate to 6.69%.
TSB lifted its floating rate 0.3% to 6.29% and its six-month by 0.25% to 6.35%.
ASB earlier lifted its floating home loan and six-month fixed-mortgage rate 0.25%, with the floating rate rising to 6.25%.
Mr Timms said the best investment advice for anyone with a personal mortgage who could not claim tax deductions on the mortgage was to pay off the mortgage from any surplus funds.
If a mortgage rate was 6%, with no tax deductions available, an investment had to earn 9% just to break even, assuming a 30% tax rate.
Any surplus funds should be used to pay the highest amount of interest-bearing debit, such as credit cards, followed by the mortgage, before turning to investments.
