Homeowners are set to take a severe hit due to Labour’s economic mismanagement, with borrowers wearing the cost of the fight to control inflation, National’s Housing Spokesperson Chris Bishop says.

“The latest analysis from the Reserve Bank will make for chilling reading for mortgage holders, with the central bank predicting the interest rate on one and two-year mortgages will hit 6 per cent next year.

“This will mean a major hit for Kiwi budgets. A household that has borrowed $700,000 would face annual interest costs of $42,000, meaning they would have to pay more than $800 a week before they even begin to reduce the actual loan.

“The pressure will be especially great for those who have recently entered the property market, with the Reserve Bank acknowledging that many first time buyers from 2021 will find it difficult to pay their mortgages and cover their other expenses.

“Kiwis are already paying more to cover their loans than they have in a long time. According to the Reserve Bank, the share of disposable income required to service a new mortgage is approaching 60 per cent, the highest it has been since before the Global Financial Crisis, under the Clark Government.

“At a time when Kiwis are dealing with soaring inflation and rising interest rates, the Labour Government has announced the largest ever spending spree in the 2022 Budget.

“While the Reserve Bank is forced to apply the brake to the New Zealand economy, Labour is working against it. Governor Adrian Orr confirmed to MPs this week that the “very high” level of Government spending is putting upward pressure on inflation.

“Grant Robertson’s spending addiction is contributing to higher interest rates, and the cost is being borne by households.

“In the face of rising costs and sharply rising interest rates, households are being asked to tighten their belts. At a time when inflation is at a 30-year high, the Government should do the same.”