Debt-free diva bursts interest rate fear bubble

Media spooking clients, adviser says

By Jayden Fennell

03 Jun 2022

A Hamilton mortgage adviser is working to deflate her clients’ fears about rising interest rates which have been pumped up by the media.

Quantum Finance’s self-proclaimed “Debt Free Diva”, Tracy Hemingway (pictured above) said people needed to realise that interest rates fluctuate over the lifespan of a home loan.

“A mortgage is considered a long-term debt,” Hemingway said. “Interest rates cannot stay at 2% forever – what goes up must come down.”

Hemingway said interest rates were a heavily debated topic in the media, especially as inflation and the cost of living were skyrocketing.

“A lot of people are struggling with this at the moment and wondering if they can afford their mortgage repayments or continue saving for a deposit for one,” she said. “First-home buyers in particular, who need to save that 20% deposit, are really struggling. With the average house price in Auckland sitting around $1 million, that amount of money is extremely daunting to young Kiwis.”

Hemingway said it was still a good time for Kiwis who wanted to buy into the current property market.

“Give it a go and buy what you can where you can,” she said. “It’s important to manage your expectations and always sit down with an adviser first to manage your pre-approval. An introduction meeting with an adviser is always free and we are here to help, so go and have a chat.”

Hemingway said once a client had their pre-approval, it was important to manage expectations.

“Now is a good time as property prices are declining and there is still stock sitting on the market,” she said. “It is a good market to negotiate in, especially if your conditions are strong and you have pre-approval ready to go.”

Hemingway’s advice to other advisers who were facing issues with clients receiving misinformation in the media around interest rates was to educate their clients.

“I am very active on social media and have worked hard to build my Debt Free Diva platform,” she said. “Social media is such a powerful tool, and I encourage other advisers to give it a go. It can help bring in new business, too. I think it would be cool if mortgage advisers could host events such as first-home buyer nights to educate their clients around this. You only get to buy your first home once, so don’t just listen to the media and ask an adviser if you have any questions.”