WestpacTrust lifts mortgage interest rate to 8pc

WestpacTrust was the first of the main banks to move in this round. Other banks are expected to follow suit.

Jane Anderson, WestpacTrust public relations manager, said "continued brisk economic growth, with strong spending by households, is putting upward pressure on inflation and has prompted the RBNZ to raise the Official Cash Rate (OCR)".

"The latest OCR rise and likelihood of more rises this year will continue to keep pressure on funding costs," she said.

The Reserve Bank on Wednesday said that future rises in the OCR were less likely that it saw in May because of the inflation-quelling effects of the rising New Zealand dollar.

The rise in the floating home loan rate would see an increase on a $100,000 home loan of $9.60 per fortnight, or $250.00 a year.

The higher floating rate takes effect from July 26 for existing customers.

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