Homeowners are bracing for higher fixed-term mortgage rates, despite a predicted cut to the official cash rate.
The Reserve Bank of New Zealand Photo: RNZ / Alexander Robertson
The Reserve Bank is due to make its last monetary statement of the year, and it is widely expected to cut the official cash rate to a record low 1.75 percent.
Despite this, ASB has increased its three-year and five-year standard rates by 0.2 percent and other banks are expected to follow suit.
ANZ chief economist Cameron Bagrie told Morning Report the higher rates were due to a rise in global interest rates and banks' need for more deposits.
"What we've seen is that the inflation profile of a lot of countries around the globe has started to pick up over the last two to three months. To be fair, a lot of that has been driven by oil prices, but that's really been enough to tip long-term interest rates off their lows."
"There's pretty intense competition out there for deposits" - Cameron Bagrie
Mr Bagrie said savers were likely to benefit from higher interest rates on deposits.
But he doubted it was a long-term trend, and said fixed-term mortgage rates may nudge back down.