A leading economist is blaming world insecurity for that difference.
In the latest move, Kiwibank has raised the floating interest rate for its mortgages.
It is the last of the five High St banks to move, and it trails behind its far more formidable big four rivals in its timing.
All have now matched the 50 point rise in the Official Cash Rate (OCR) announced by the Reserve Bank on Wednesday of last week.
As a result, Kiwibank's two variable rates go up from 6.5 to 7.0. Its revolving rate goes up from 6.55% to 7.05%.
These remain slightly lower than the big four, and were praised in an accompanying statement from Kiwibank Senior Manager for Savings and Borrowing, Richie McLay.
Over the past two years we’ve consistently had one of the lower variable rates in the market,” he said.
The move in floating rates is in stark contrast with fixed rates, which have not budged since the OCR was raised.
The independent economist Tony Alexander thinks that differential might not last, but for now the banks are in a holding pattern.
“I would think the banks are wanting to get a feel for where the swap rate settles before they move (on fixed interest),” he said.
“There is definitely pressure to move. The margins right across the board are about 1% below the average for the past few years.”
But Alexander said the uncertain world situation was causing banks to wait and see.
“There is a round of fixed interest rate increases coming, but the environment we face is one of the most volatile we have seen in a great number of years.
“I think the only reason the banks are waiting is they don't want to put rates up, and then all of a sudden, everything is nice and sweet in the UK and the inflation number is good in the US and they have to cut them again."
“That is the only explanation If the cost of money were 40 points lower, I might say, maybe they are just looking to win some good business, with the Spring mortgage campaign, but that would not cut the mustard given the depression in the margins at the moment.”
