Today’s 50 basis point increase in the official cash rate means more pain on the horizon for anyone with a mortgage, National’s Finance Spokesperson Nicola Willis says.

“Rising interest rates will be difficult news for Kiwis already battling the cost of living crisis. This is the first time ever the Reserve Bank has increased the OCR by 50 basis points twice in a row, reflecting just how severe inflation has become.

“We’ve known since last year – well before the Russian invasion of Ukraine – that New Zealand had an inflation problem, but the Government’s only response has been to put more fuel on the fire with more spending.

“Now the Reserve Bank has no choice but to increase the OCR, pushing up interest rates across the whole economy and creating more pain for mortgage holders.

“A family with a $700,000 mortgage is on the hook for $14,000 more a year in interest than this time last year. If, as KiwiBank expect, mortgage interest rates rise to at least 6 per cent, a Kiwi family with a $700,000 mortgage will be paying at least $42,000 in interest a year – around $800 a week in interest alone.

“The Government should adopt National’s five point plan to fight inflation – return the Reserve Bank to single focus on price stability, reduce costs on business, remove bottlenecks in the economy, rein in government spending, and prioritise tax relief for workers.”