ASB raises longer term home loan rates

ASB has raised its longer term home loan rates, with the five-year rate rising to 8 percent.

ASB has raised its three-year rate by 20 basis points to 6.95 percent, its four-year rate by 30 basis points to 7.55 percent and its five-year rate by 50 basis points to 8 percent.

Other banks have been raising longer term fixed rates but the move to 8 percent in the five-year rate is seen as a big one.

Many banks had five-year fixed rates of 6.5 percent in March but started hiking them when rates in the wholesale swap market started rising.

Higher mortgage rates are expected to anger the Reserve Bank of New Zealand ahead of its monetary policy statement next Thursday.

Economists are divided on what the bank will do in that statement, with some expecting the bank to keep its official cash rate at 2.5 percent and others expecting a 25 basis point cut.

The central bank has said it expected to keep the rate at or below 2.5 percent until the latter part of 2010.