The planned changes come as rising geopolitical tensions cause wholesale rates to surge, Westpac NZ’s product, sustainability and marketing managing director, Sarah Hearn, said.
A third of Westpac’s current home lending is on the two-year rate.
Banks use wholesale rates to fund longer-term lending.
“Even with today’s rate changes, we’re absorbing a lot of our recent cost increases rather than passing them on to home owners.
“With the OCR [Official Cash Rate] forecast to rise over the next year, now is a good time to think about your home loan strategy and what options may be best for you.”
The two-year rate could be a good option for home owners wanting more certainty on repayments, and “potential protection” against rate rise, Hearn said.
“A third of our current home lending is on the 2-year rate so we know this is a popular term for customers.”