Rising mortgage interest rates have widened the gap between what it costs to buy a house versus renting one, according to BNZ chief economist Mike Jones. Interest costs are split equally across floating and 2-year fixed mortgage rates. To this we add maintenance, rates, and insurance costs at an assumed annual rate of 1.5% of the national median house price. "In terms of operational costs – the cash leaving a bank account each week – the costs of servicing a new house purchase are currently much more expensive than equivalent rent costs," Jones said. "Overall, it’s clear that high interest rates have widened the wedge between the costs of renting vs.
