These rising interest rates are also heightening the risk of mortgage shock for many homeowners who locked in fixed rates around two years ago. "A director of one of the major banks suggested that a large chunk of borrowers are sitting on a fixed mortgage rate with a two in front of it. We're now seeing mortgage rates at 5, 6 or 7 per cent. And that's where the mortgage shock comes from." The banks remain confident that most homeowners will be able to withstand the impact of this shock, but some families will be affected.

Source: New Zealand Herald October 19, 2022 12:52 UTC