Warning bells on mortgages
Retirement Commissioner Diana Crossan has warned homeowners to beware of taking out mortgages that may soon be unaffordable because of rising interest rates.
Monday, November 21st 2005, 5:57AM
by The Landlord
She said fixed-rate mortgages - now used by 80 per cent of New Zealanders with mortgages - provided no protection when the term ended.Her warning, issued to coincide with the launch of a new mortgage calculator on the commission's website, reinforces a strong statements from Reserve Bank Governor Alan Bollard and Finance Minister Michael Cullen about the dangers of rising household debt.
Dr Bollard has raised the official cash rate eight times since the start of last year, from 5 to 7 per cent.
Average floating mortgage rates have risen in the same period from 7.2 to 9.1 per cent.
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