Mortgage payments skyrocket over 15 years
Over the past 15 years, the average Kiwi household mortgage repayment has nearly doubled, with the steepest jump in the last two years.
Weekly repayments rose from $475 in 2022 to $606 in 2023.
Homeowner Jackson Hapeta saw his mortgage rate climb from 2.5% to nearly 7% after refixing, pushing his fortnightly payments up by $1,000.
“We had to cut back on quite a number of things,” Hapeta told RNZ, describing changes like switching supermarkets and canceling family trips.
Tauranga homeowner Fiony Vuleta shared similar struggles, saying more than half of her family income now goes toward their mortgage.
“One of our incomes, the whole lot’s going on just for now,” Vuleta said.
One in four overburdened by mortgages
Recent research from the Finance and Mortgage Advisers Association of New Zealand FAMNZ found that one in four households spend more than half their income on mortgage repayments.
FAMNZ country manager Leigh Hodgetts (pictured above left) noted that many Kiwis are holding off on refixing their loans, hoping for better rates after the upcoming Official Cash Rate (OCR) announcement.
Will the OCR bring relief?
Economist Brad Olsen (pictured above right) predicts a 50-basis-point cut to the OCR, bringing it down to 4.25%, RNZ reported.
Olsen acknowledged falling mortgage rates but warned that banks might not immediately follow with further rate reductions.
“There does seem to be some front loading of those interest rate cuts that have already been priced into people's mortgage rates,” he said.
Balancing hope and reality
While rate cuts could ease pressure, Hodgetts cautioned homeowners against breaking fixed-rate loans prematurely, citing costly break fees.
Despite the challenges, Vuleta remains optimistic: “Hopefully, when the OCR goes down and rates go down again, that will take the load off.”
The Reserve Bank will announce its next OCR decision on November 27, leaving homeowners anxiously waiting for potential relief, RNZ reported.
To read the article in full, visit RNZ.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
