It's the most significant rise since 2008
New Zealand households with mortgages experienced a 27.5% increase in their average weekly mortgage payments, reaching $605.60 up from $475 the previous year, according to Stats NZ's latest figures.
This leap, the most substantial since 2008, is attributed to rising interest rates.
“The rise we’ve seen is primarily driven by increases in interest rates for mortgage-holders,” said Victoria Treliving, wealth and poverty statistics manager at Stats NZ.
Interest payments on mortgages jumped 49.9% in 2023, while principal repayments remained steady at $307.90.
“Weekly payments on interest are typically higher than the amount spent on principal repayments, although this was not the case in 2021 and 2022,” Treliving said.
A growing housing affordability crisis
The financial strain on households has intensified, with one in five (18.2%) now allocating more than 40% of their disposable income to housing costs, a 2.9-percentage-point increase from the previous year.
“The rise in mortgage payments has led to more households spending a large proportion of their budget on housing costs, reducing the amount available for meeting other everyday expenses,” Treliving said.
The proportion of mortgage-paying households spending over 40% of their disposable income on housing costs has risen to 22%, up 4.2 percentage points.
Meanwhile, one in three renting households (28.9%) allocated more than 40% of their disposable income towards housing costs, maintaining the same rate as the previous year, the Stats NZ data showed.
Click here to access the Stats NZ report.
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