Consultant Jim Reardon believed banks’ one-year and 18-month mortgages were a little overpriced, given where wholesale interest rates have landed. He couldn’t see mortgage rates rising in the next few months. Reardon believed banks’ margins were roughly back where they were before participants in financial markets over-reacted to the Reserve Bank’s commentary at the end of 2025, and wholesale interest rates shot up. Wholesale interest rates jumped, financial market conditions tightened, banks’ margins narrowed, and banks lifted their longer-term fixed mortgage and term deposit rates by about 30 basis points. Reardon believed banks would welcome wholesale rates dropping off a bit.

Source: New Zealand Herald February 20, 2026 08:16 UTC