A major bank is warning fixed term interest rates on mortgage loans may well rise further.
BNZ, Westpac, ASB and ANZ and National Bank have raised rates on four and five-year mortgages in the past fortnight.
The banks blamed the increase on high costs of raising funds offshore and rising term deposit rates at home.
Westpac general manager of product David Cunningham says longer term fixed mortgage rates may rise another one-quarter or one-half of a percentage point.
Kiwibank on Tuesday raised its fixed five-year mortgage rate by a quarter of a percent to 6.75%.
Kiwibank says wholesale rates are moving and it is reacting to market conditions. It says there are no plans to adjust other rates at this stage, but warned things can change quickly.
ANZ and National Banks on Monday raised rates on fixed term loans. The increases apply to three, four and five-year fixed term home loans.
A three-year fixed mortgage has gone from under 6% per cent to 6.15%, a four-year mortgage has increased from 6.40% to 6.55%, while a five-year mortgage has risen from 6.5% to 6.75%.
Chief economist for ANZ National, Cameron Bagrie, says banks get a large share of their funds offshore and interest rates on these funds have risen in the past two months due to renewed fears about the global banking sector.
Mr Bagrie says banks are forced to compete for local savings, which is pushing up the rates they must offer on term deposits.
This is increasing the cost of money overall that banks lend and they are merely passing this on to households, he says.
Other bank economists say it is not just the banks that are competing for savers' deposits.
They point to a number of big companies bypassing banks and borrowing directly from savers through bond issues.
Economist Gareth Morgan told Morning Report on Tuesday that it might be time for those with mortgages to begin moving part of their loan from a floating rate to a fixed rate.
Massey University director of banking studies David Tripe is warning people to think carefully about their long term financial needs before refinancing.