Westpac announces second lot of mortgage rate hikes in May ahead of key Reserve Bank decision

Westpac is hiking most of its special and standard mortgage rates by as 20 basis points. The bank said its one- and 18-month special fixed-term rates would increase by 10 basis points (bps) to 4.79% and 5.09% respectively from Friday. Its three-year fixed special rate will jump 14bps to 5.49%. Its four- and five-year special rates will increase 20bps to 5.59% and 5.79% respectively. It’s the second rate hike in May by Westpac, which earlier in the month lifted its six-month fixed terms by 20bps to 4.69% (special) and 5.29% (standard). The bank also increased its three-year fixed terms by 6bps to 5.35% (special) and 5.95% (standard). The Reserve Bank (RBNZ) is due to make its next Official Cash Rate (OCR) decision on Wednesday, May 27. The OCR currently sits at 2.25%, where it has been since November last year. Higher-than-expected inflation figures have lifted the odds of the first OCR hike coming in May. New Zealand’s Consumers Price Index (CPI) increased 3.1% in the 12 months to the March 2026 quarter, according to Stats NZ. That’s above the RBNZ’s target band of 1-3%. Market pricing now points to a 40% chance of a 25bps rate hike in May, up from a 20% before the CPI’s release.

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