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.”