Kiwi Banks Hike Mortgages Fully, Leave Savers Behind: FMA Flags Disparity

New data from New Zealand's Financial Markets Authority (FMA), released today, reveals a stark difference in how major banks are handling recent interest rate increases. The FMA found that while the latest 0.25 percentage point rise in the Official Cash Rate (OCR) was fully passed on to customers with variable mortgage rates, many savers saw little to no increase in their on-call savings accounts. This means borrowers are feeling the pinch immediately, while those saving money aren't getting the full benefit of higher rates. This unequal treatment by banks effectively widens their Net Interest Margin (NIM) – the profit difference between what they earn on loans and what they pay on deposits. The Reserve Bank of New Zealand (RBNZ) recently lifted the OCR to 2.75% on September 2nd, aiming to cool down inflation, which hit 4.1% in the second quarter of 2026. This move was the second consecutive hike, following a similar increase in July. The FMA report highlights a long-standing concern about how quickly banks adjust their lending and saving rates in response to central bank decisions. Going forward, the FMA move to publish these 'speed and size' comparisons is a clear push for greater transparency, aiming to make it easier for customers to understand and compare bank behavior. This increased scrutiny could pressure banks to adjust their savings rates more fairly in the future, potentially impacting their profitability but offering a better deal for everyday savers. Observers will be watching to see if this data leads to any policy changes or increased competition among banks.