What Mortgage Repayments will cost as rates rise

Date 21 Feb 2022

Mortgage rates are on the rise and that means homeowners should prepare themselves for a hefty increase in their monthly repayments.

The emergency monetary stimulus provided by the Reserve Bank when Covid first hit took already low mortgage rates to historic lows.

But last year the Reserve Bank started to unwind that stimulus, and hiked the official cash rate (OCR) from 0.25 per cent in August to 0.75 per cent by November.

For homeowners, this means that mortgage rates have already climbed sharply from the low to mid 2 per cent range late last year.

Standard one-year fixed rates across the big four banks and Kiwibank now range from 3.85 to 4.54 per cent, while standard two-year fixed rates are between 4.15 and 5.20 per cent.

Further increases are expected, although there are question marks around how far they will go, as economists say markets have already baked in a substantial number of hikes over the coming years.

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What Mortgage Repayments will cost as rates rise