Banks use test rates to assess would-be borrowers’ capacity to meet repayment requirements if interest rates rise. ANZ NZ is NZ's biggest home lender with a $105 billion home loan portfolio. Speaking to interest.co.nz after ANZ NZ released its interim financial results on Friday, Watson said the 25% figure for borrowers stress tested in 2020-21 was "probably about right" for ANZ NZ's home loan portfolio. Nonetheless Watson says ANZ NZ is keeping a close eye on borrowers who bought homes in 2020-2021 and whose mortgage rate may now be higher than the rate they were tested on. People have been paying down their debt because when interest rates went down they didn't readjust their home loan repayment.

Source: Stuff May 08, 2023 05:13 UTC