Centrix managing director Keith McLaughlin said the jump was a consequence of rising property prices and low interest rates. He said there was a growing consensus that interest rates would start rising before the end of the year to counter growing inflationary pressure. "While we don't know the scale of future interest rate increases, we can expect any rise to place pressure on those households who have not factored increased repayments into their budgets." He said while interest rate increases might appear to only cost a little bit more in the short term, the longer-term cost could be hefty. Farry said a $1m loan at a 2.5 per cent interest rate cost $911 a week to service - a $421,000 interest cost over 30 years.

Source: New Zealand Herald August 13, 2021 17:03 UTC