As well as the strain of higher mortgage rates, council rates and insurance costs, many mortgage holders are in survival mode waiting for interest rate cuts that aren’t likely until next year. That is despite two major banks saying it will be late this year.

Increasing costs are also weighing heavily on business owners. The number that has fallen behind on mortgage payments is about three times higher than among homeowners on salaries.

Bolton says the Reserve Bank wasn’t afraid of a recession to get inflation back under control and Stats NZ has confirmed the country tipped into a double dip recession at the end of last year. 

“The RBNZ has done enough damage and it may be this that prompts it to start dropping rates again. Despite the rhetoric coming out of the RBNZ that it’ll be late 2025 before it starts cutting the OCR, I suspect it will be singing that tune right up until the moment it announces the first OCR  cut,” he says.

Along with financial markets pricing in rate cuts this year, Bolton says he is expecting rate falls to start from the middle of this year. ANZ and Kiwibank are not expecting rate cuts to start until November.

Meanwhile mortgage competition is heating up between the banks.

The major banks have been dropping their fixed-term rates in recent weeks.

Bolton says a lot of this is down to Kiwibank’s growing influence. “It tends to price more competitively than the big four – ANZ, Westpac, BNZ and ASB – as a baseline – and it’s reached a size in the market where the big banks can’t afford to ignore that anymore.”

The most competitive space at the moment, he says, is the popular one-year fixed term, which is anywhere from about 6.89% through to 6.99%.

Bolton says there are still some great cash back deals available, for those in a position to refinance or who are buying a new property, with up to about 0.8% of the total loan amount.