The Good Returns mortgage rate table is awash with red this week as lenders push rates up even though there has been no change in the official cost of borrowing in New Zealand.
A general re-pricing of home loan rates appears to be underway, with increases from some banks of up to 30 basis points, rises that would normally only be prompted by a rise in the official cash rate (OCR).
These changes have been prompted by the rising cost of finance in international wholesale money markets and also by signs of strength in the New Zealand economy that indicate that our OCR remains under pressure.
The problem in international markets is the still-unfolding credit crisis sparked by defaults on sub-prime lending in the United States. Fresh revelations of multi-billion dollar losses among leading US banks have raised new uncertainties about the depth of the crisis and its potential to unsettle economies.