Mortgage interest payments rising rapidly
It is the highest since collection of the data began in 2014.
In the March quarter last year just $2.47 billion was charged in interest, the latest Reserve Bank residential loan reconciliation figures show.
This was at a time when many mortgage borrowers were paying interest on their loans of between 2-3%. A year later, and with 12 consecutive hikes to the official cash rate (OCR) to 5.25% and another 25bps hike expected this month, leading to interest rate hikes, the record amount paid in interest-only is expected to increase again.
The New Zealand Banking Association says while the Reserve Bank is raising the cost of borrowing to help fight inflation, people are starting to borrow less. That’s also a reflection of the property market. “Many households are doing it tough in the face of the rising cost of living,” says Roger Beaumont, the association’s chief executive.
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