Most New Zealanders with a mortgage are confident of meeting their repayments over the next year, but there could be clouds on the horizon for those whose fixed interest rate is about to expire.

A Genworth Financial survey of 1,000 New Zealanders found that 78 percent said they had fixed rate mortgages. Around one-quarter of people with fixed rate mortgages said they would have to renew in the next 12 months at higher interest rates.

Two-year fixed-rate mortgages are available in New Zealand today at an interest rate of around 9.5%. People who took out fixed-rate mortgages two years ago would have done so at around 8%. This means interest payments on a $200,000 mortgage today are $250 per month higher than two years ago, pushing up the cost of home ownership considerably.

Fixed Rate Mortgage Rates

The Genworth Financial Survey Found:

  • 31 percent of respondents who owned residential property were mortgage free;
  • 78 percent of respondents with a mortgage had a fixed rate while 22 percent had a variable rate.
  • 70 percent of investment property owners saw property as a long-term investment to provide income in retirement;
  • The reason considered most likely to cause difficulty in making mortgage repayments was a change in personal circumstances such as divorce, pregnancy or a job change.
  • 80 percent of property owners obtained their most recent mortgage from a bank with 25 percent of borrowers having used a mortgage broker;