Major bank latest to lift home loan rates as wholesale costs climb
Major New Zealand banks, including ASB, have raised fixed home loan rates following an increase in wholesale funding costs linked to Middle East conflict. The hikes affect various fixed terms, with the 18-month rate seeing the most significant increase.
Why it matters
Rising interest rates directly impact consumer borrowing costs and housing affordability, reflecting how geopolitical instability can influence local economic conditions.
ASB has become the latest major bank to lift its fixed home loan rates, following increased wholesale funding costs driven by new escalations in the Middle East. The bank joins the country's largest bank, <a href="https://www.1news.co.nz/2026/08/04/nzs-largest-bank-hikes-home-loan-rates-as-middle-east-conflict-bite/">ANZ</a>, along with <a href="https://www.1news.co.nz/2026/08/04/nzs-largest-bank-hikes-home-loan-rates-as-middle-east-conflict-bite/">Westpac</a> and <a href="https://www.1news.co.nz/2026/08/05/another-big-bank-hikes-home-loan-rates-amid-mideast-war/">BNZ</a>, in raising home loan and term deposit rates. Home loan rates increased across most fixed terms, with the biggest rise on the 18-month term, up 26 basis points to 5.35%. One-year rates rose 24 basis points to 4.99%, two-year rates increased 20 basis points to 5.45%, three-year rates climbed 16 basis points to 5.45%, and six-month rates edged up 10 basis points to 4.79%. Four- and five-year rates were unchanged.
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