George Carter says the current cost rate of New Zealand money has increased which has a knock on effect on bank variable rates and in turn is affecting the cost of Kiwi’s borrowing rate on mortgages and savings investments.
With that margin increasing, Carter says typically it has been around 2% between those numbers and over time it has steadily crept up and is at a peak of 4.5%.
“Although those numbers have dropped back a little, it’s still at a relatively all-time high.”
Carter says this additional cost is affecting both mortgage costs and savings for the average Kiwi retirement. However, it’s not all doom and gloom and there are practical solutions to help offset the current rising cycle.
“The key things is doing your homework and knowing what you are paying. You can negotiate with banks on rates and if you are fixing your mortgage, you’re not always beholden to the changes on a variable rate on any given day,”
Understanding your finances is a key part of managing your personal wealth.”
As for the foreseeable future of interest and mortgage rates there is a prediction of things reaching the end of its current rising cycle with hopes of maintaining a reasonable stability for some time.