Double hit for home owners

Reserve Bank governor Alan Bollard lifted official interest rates to 7.25 per cent yesterday – and banks are poised to lift floating mortgage rates to 9.5 per cent within days.

The increase would add $35 a month to repayments on the average new home loan of $200,000, taking repayments to almost $1750 a month.

The Reserve Bank's latest interest rate increase – the second in less than two months – will hit 40 per cent of homeowners over the next year as current fixed rate mortgages come up for renewal.

On average, homeowners pay about 7.2 per cent on fixed rates, but when they renew it will be at 8.3 per cent or more.

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