Get ready. Fixed mortgage rates are climbing once more!

Kiwibank has raised its home loan rates again this month, joining other major banks in doing so. They've increased rates on various fixed-term mortgages, meaning it'll cost more for people to borrow money for a home. For example, if you want to lock in a rate for 1 or 2 years, you'll now pay more interest than before. This isn't just happening at Kiwibank – other banks like BNZ and ANZ have also been increasing their rates over the past couple of months.

Kiwibank specifically bumped up rates on their 6-month and 1-year fixed loans. Even their longer-term loans, like those for 2, 3, 4, and 5 years, have seen rate hikes. Their rates for borrowing without a big deposit have gone up as well.

Kiwibank mentioned that this change affects both new and existing customers. They explained that the reason for these increases is that the cost of getting the money they lend out has gone up, even though the official interest rates set by the government haven't changed recently. They've advised customers feeling concerned about these changes to reach out. They want to help people manage their finances during this time.

Wholesale markets take a U-turn. What's next? 

Kiwibank's chief economist, Jarrod Kerr, explained that after facing increased costs to get money from big sources, like other banks, there's now a bit of a change happening. Recently, these big money markets have begun to go in a different direction, meaning the costs might not be rising as much right now.

"Recently, the costs for banks to get money from big sources have dropped. If this trend continues, regular people might start to see lower interest rates for loans and savings", he said. 

Right now, the rates for fixed-term savings accounts are about 6.15%. This is a big part of how banks get the money they lend out. But even though this cost is still somewhat high, Kiwibank wants to attract more money from customers by offering good rates for their savings.

Financial experts used to think the official interest rates set by the government would go up next year. Now, they're thinking these rates might actually go down in 2024.

If that happens, it could mean that the costs for banks to get money will go down even more. Eventually, this might lead to lower interest rates for people taking out loans.Kiwibank believes that the highest official interest rates are already behind us. They think that next year, loan rates might start going down, but it depends on how the economy is doing.

They expect the prices of things we buy (inflation) to drop to about 3% before the government considers lowering the interest rates. They think this might happen by the middle of next year or possibly by the middle of 2024. Another bank, Heartland Bank, is offering some of the lowest fixed loan rates at the moment, sitting at 6.99% for a 1-year fixed rate and 6.85% for a 2-year fixed rate.

The Reserve Bank will talk about all of this and more in its next big announcement on November 29.