ASB has become the first major bank to raise its variable mortgage rate since the Reserve Bank of New Zealand hiked the official cash rate by 25 basis point to 2.75 percent last week.
"With overall funding costs having increased, we have made the decision to lift our variable home lending and savings account rates by 0.25 percent. Our variable rate is now at 6 percent," Catherine McGrath, chief executive customers, markets and products, said.
The six-month fixed home loan rate rises by 25 basis points to 6.1 percent and the one year fixed rate rises by 10 basis points to 6.45 percent.
The variable home lending rate change is effective as from June 18 for new customers and from July 5 for most existing customers. Fixed lending rate changes are effective as from June 18 for all new lending. The bank is also increasing deposit rates from June 25.
Ms McGrath said the rise in the official cash rate was the first since July 2007, and further increases were anticipated in coming months.
"The increases we are making today take into account both our offshore funding costs and the continuing pressure on retail deposit rates in New Zealand," she said.
"The market is now entering a new cycle, and we need to ensure our products are priced appropriately based on our underlying costs. With this in mind, we have also increased a number of our deposit rates today, ensuring our savings customers see the benefit," said Ms McGrath.
