Westpac NZ is making changes to its Choices fixed term home loan rates after a sharp rise in wholesale interest rates following the Reserve Bank’s late-November OCR cut.
]Effective Wednesday, the bank is reducing its 6-month advertised special rate to 4.69% while increasing longer 2- to 5-year fixed rates by 0.30%.
The new 6-month rate is the lowest among the country’s five biggest banks as of Tuesday afternoon.
Sarah Hearn, Westpac NZ managing director of product, sustainability and marketing, said the bank was balancing rising funding costs with support for customers.
She said: “We were the first of the five biggest banks to cut our variable lending rates following the official cash rate cut two weeks ago.
“Conversely, fixed rates are mainly driven by movements in wholesale interest rates rather than the OCR.
“While the OCR has fallen, wholesale rates have lifted materially, by more than 0.4% on longer terms since the day before the OCR announcement.”
Hearn said the bank was absorbing part of the increase in wholesale borrowing costs while offering value for borrowers seeking short-term flexibility.
She said: “With today’s changes, we’re holding back some of the increase in wholesale borrowing costs to customers, while also offering great value for those looking for short-term flexibility with our new 6-month advertised special rate.”
She added that Westpac was also supporting savers by lifting all term deposit rates of one year or longer, noting that the bank had held its variable Notice Saver rate at 3.00% through the last three OCR cuts.
Wholesale rates have risen steadily since the end of November, with the two-, three-, four- and five-year swap rates all up by around 0.40% to 0.46% compared with the day before the OCR announcement.
“The increases have flowed into the bank’s pricing for longer-term fixed home loans as well as its term deposit and PIE rates.
Hearn said: “Whether you’re a borrower or a saver, we encourage you to come and talk to us, or a trusted advisor, on what approach may work best for you through 2026 and beyond.”
Westpac’s updated home loan and deposit rates are subject to lending and eligibility criteria and may change without notice.