What do OCR changes mean for you?

The Reserve Bank of New Zealand has raised the Official Cash Rate (OCR) for the firsttime in seven years – with some economists predicting further increases still to come.

While the change is intended to maintain low inflation and stabilise the housing market, it’s important to understand how the change could impact your personal finances.

First home buyers

Many Kiwis are finding it increasingly difficult to buy their first homes, and as property prices continue to climb, things aren’t getting any easier.

With increased rates, future mortgage repayments may be slightly higher, but there is some good news, too.

Experts expect to see reduced investor interest, which may help to cool the market and give house hunters more opportunity to buy – and for a better price!

Property investors

If you have an investment property, it’s worth doing the math and weighing up whether the increased rates will continue to provide a good return on your investment.

For some, the OCR changes may not have a significant impact, while others may feel they are better off investing elsewhere.

You may also want to consider any potential growth of the property value, given that supply remains in hot demand.

Looking to upsize

Homeowners looking to upgrade to a larger property are likely to feel the effects a little more – particularly if they take out a larger mortgage with a higher interest rate.

Depending on your circumstances, you may also see changes to your borrowing power.

A Mike Pero Mortgage Adviser can support you to review your options and create a plan to help you achieve your homeownership goals.

To find out more, contact your local Mike Pero Mortgage Adviser today.