Survey Highlights Homeowners Unfazed by Interest Rate Rises

Survey highlights homeowners not fretting about interest rate rises

Monday 17 July 2017 - A new survey has revealed Kiwi homeowners are largely unfazed about their ability to cope with mortgage rate rises, but they are continuing to find it difficult to curb spending on consumer items.

The nationwide survey of 1,994 homeowners by the company, New Zealand Home Loans (NZHL), found more than half of respondents (57.6%) were either not concerned or were neutral about the potential for future interest rate increases.

The sentiment comes as the Reserve Bank left the official cash rate (OCR) on hold last month at 1.75% and economists are increasingly predicting rates to remain unchanged for some time yet.

Despite the view of interest rates, there is concern about the respondents’ ability to curb spending. The biggest problem area for curbing spending is on unplanned spending on consumer items such as household electronics, tools and sports goods where 47% of respondents found difficulty controlling spending and secondly for services like household maintenance at 46%.

Entertainment, such as concerts and movies and bad habits like cigarettes and alcohol are two other areas where respondents expressed difficulty in managing their spending.

NZHL Chief Executive Julian Travaglia says the survey results highlight some home truths about how people can manage their finances better.

“It is refreshing to see that homeowners are not overawed by the prospect of future rate rises. Not just because rates aren’t expected to change dramatically anytime soon but more because if we are to seriously tackle the amount of household debt we have as a nation, it is less about the actual interest rate and more about the rate home loans are paid off.”