ASB economists are tipping that New Zealand mortgage rates will “peak higher and earlier” than previously thought as the Reserve Bank of New Zealand (RBNZ) hikes the Official Cash Rate (OCR) to counter rising inflation. If ASB’s 3.25% OCR forecasts come to fruition and are passed onto New Zealand mortgage holders, then the average floating mortgage rate would rise to 7.33%. “There will be people who have to sell and sell down.”Recent leveraged first home buyers are about to get a harsh dose of interest rate reality. If the RBNZ lifts rates as aggressively and ASB is predicting, then highly geared mortgage holders are cruising for a bruising. New Zealand house prices would likely experience sharp falls and many recent buyers will likely be thrown into negative equity.

Source: Stuff April 20, 2022 05:53 UTC