More pain in store for mortgage holders

For a minority of homeowners that will mean moving off the extremely low fixed interest rates of June 2021, when the average one-year term was just 2.2% and the two-year rate was 2.6%, and for others, who initially repriced at 5-6% having to move another 1-2%, it means a rate with a seven in front of it.

While the bulk of the repricing from the extremely low to higher interest rates has happened, there is more to come.

Of those who are refixing, RBNZ figures show 10% are choosing floating but by far the dominant choice is one year or less on fixed rates, with 56% of new loans across house purchases, bank switches and top-ups being at this level.

It’s a big increase from three months ago, with economists saying it is indicative of people believing bank interest rates have peaked and they will come down by the end of this year or sometime next year.