The situation is likely to worsen this year given New Zealand faces a glut of fixed rate mortgage expirations. More than half of all fixed rate mortgages will terminate this year, meaning many borrowers will see significant increases in their debt servicing payments as they transition from ultra cheap pandemic mortgage rates. AdvertisementIndeed, Westpac recently estimated that the ‘effective’ average mortgage rate in New Zealand would double in 2023 as these fixed rate mortgages are repriced:“For example, a borrower who fixed their mortgage at 2.7% in 2020 will now face refixing at a rate over 6%”, noted Westpac. AdvertisementThat is when the aggressive interest rate hikes from the Reserve Banks will truly be felt. Monetary conditions will continue to tighten across New Zealand, which will hammer household consumption and plunge the economy into recession.

Source: Stuff April 18, 2023 13:02 UTC