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HOME mortgage interest rates are rising, with three of the big five banks increasing floating interest rates to 7.2 per cent.
WestpacTrust increased its floating rates by 0.5 per cent to 7.2 per cent followed by ASB Bank and ANZ.
All three have increased fixed-term interest rates, with the 12-month rate rising to 7 per cent at WestpacTrust and 7.35 per cent at ASB and ANZ.
On a table mortgage of $100,000 over a 20-year term, the rise equates to an increase of $30.05 a month.
The biggest home lender, National Bank, increased fixed-term rates, with its 12-month rate now 7.35 per cent. It left its floating rate at 6.7 per cent.
The increases are in response Reserve Bank governor Don Brash lifting the official interest rate 0.25 per cent o 5 per cent.
Further Reserve Bank rises are expected in May - probably 25 basis points, economists said.
Dr Brash's move also came under attack from business and unions.
The Export Institute said the rate rise would constrain export volumes when prices were already dropping rapidly. The rise was out of step with trading partners such as the United States.
The Auckland Chamber of Commerce said the rise threatened prospects of badly needed growth getting traction, while the Council of Trade Unions said it was disappointed with the rise.
WestpacTrust defended the increase, saying the 90-day bank bill market was the key source of funding for home loans and 90-day rates had climbed 0.7 per cent since December.
Floating mortgage rates are tipped to be 8 per cent early next year, peaking at 9 per cent by late next year.
WestpacTrust general manager of marketing Tim Harrington and ANZ managing director Murray Horn both said the 90-day wholesale rate had been rising in anticipation of Dr Brash tightening monetary policy.
Institute of Economic Research economist Vhari McWha said interest rates were likely to move up about 1 per cent by year-end. "We are expecting rates to gradually rise over this year ... He [Dr Brash] was perhaps too aggressive."

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