Today’s decision by the Reserve Bank to keep interest
rates at their super high levels will be difficult news for
Kiwis struggling to pay their mortgages, National’s
Finance spokesperson Nicola Willis says.
“This
latest OCR decision by the Reserve Bank continues a long
road of high interest rates, with the OCR not expected to
come below 5 per cent until the start of 2025, as elevated
levels of inflation persist in the New Zealand
economy.
“New Zealand has higher inflation today
than the United States, Australia, Canada, Japan, and most
of Europe, which is why homeowners here are being forced to
pay higher interest rates.
“Financial dread is
seeping into the mortgage belt of New Zealand, as thousands
of families re-fix onto much higher rates. For a family
already struggling with the price of food and petrol,
finding hundreds of dollars more every week is
frightening.
“Fortnightly interest costs on a
$500,000 mortgage have gone from $500 to $1,250 in the past
two years alone.
“Last month the average special
interest rate advertised by the banks on a 2-year fixed
mortgage on a residential property was 6.5 per cent. Two
years ago, it was only 2.6 per cent.
“Home ownership
is supposed to be a vehicle for economic security –
enabling families to build an asset for the future. But for
thousands of New Zealanders, home ownership is sucking their
back accounts dry.
“Labour’s economic
mismanagement is responsible for this mortgage carnage. When
inflation began to surge two years ago, they should have
presented a plan to beat it. Instead, they piled on the
pressure with billions of dollars of fresh spending and
band-aid economics, leaving the Reserve Bank to fight
inflation with higher interest rates alone.
“This
has led to the fastest rate-hiking cycle in the history of
the OCR, resulting in mortgage carnage for everyday
homeowners.
“National has a plan to beat inflation
and take pressure off interest rates. We would reduce costs
on business, eliminate bottlenecks in the economy, restore
the Reserve Bank’s focus on inflation, deliver tax relief,
and restore fiscal
discipline.”
