These four NZ banks didn’t change their mortgage test rates after last week's OCR hike
Four major New Zealand banks have opted not to change their mortgage serviceability test rates despite a recent increase in the Official Cash Rate. These internal rates are used to assess a borrower's ability to handle future interest rate hikes.
Why it matters
This decision impacts the borrowing capacity of potential homeowners and reflects how banks are managing risk in a fluctuating interest rate environment.
Four of New Zealand’s major banks have confirmed they haven’t changed their mortgage serviceability rates following the Reserve Bank’s first increase to the Official Cash Rate (OCR) in three years.
The RBNZ raised the cash rate for the first time since May 2023 last week, from 2.25% to 2.50% .
The 25-basis-point increase was widely anticipated by some bank economists but caught others by surprise. However, most bank economists believe that now the RBNZ has hiked the OCR, multiple further hikes are on the horizon before the end of the year.
Following the cash rate increase, ANZ NZ, ASB, BNZ and Kiwibank told interest.co.nz their mortgage serviceability test rates remain unchanged.
Banks use mortgage serviceability test rates to gauge the repayment capacity of would-be home loan borrowers if interest rates rise. A lower test rate increases borrowers’ borrowing capacity.
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