A young family Auckland who bought a home two years ago say it's "extremely tough" to be facing a doubling in interest payments on their mortgage.
Mortgage interest rates reached a low of 2.25 percent in 2021, but with the Reserve Bank hiking the official cash rate in an effort to curb inflation they are now hovering near 7 percent.
Rory O'Sullivan told RNZ's Morning Report he and his wife had become spreadsheet experts in the past few weeks as they prepared to refix their mortgage.
"This is money that hasn't been there before that we've suddenly got to stump up and find from somewhere," he said.
"We're on 3.5 percent - so still a little bit above those really lowest ones - but that's going to pretty much double. It will depend on the term that we end up going for but we're looking at a 6.7 percent interest rate."
He said they were facing having to find nearly $2000 a month extra for interest alone, and had to use "a lot of creativity" in budgeting to make it work.
"We've gone through with a really fine-toothed comb in terms of what are the non-negotiables in terms of outgoings, what are the things that we can genuinely, actually bring down.
"Since November we've anticipated this, obviously, and we've been engaging a new mortgage broker. All sorts of advice and help and seeing what we can do, because at the moment we can't afford that."
Westpac's latest economic analysis found half of all fixed-term mortgages in New Zealand will come up for repricing in the next year, as the economy tips towards recession.
It expected increased unemployment, and businesses have some of the lowest confidence on record.
It all points to less spending from households and businesses alike: exactly what the Reserve Bank is aiming for to help slow inflation.
O'Sullivan said there were some things the family were unable to cut back on - like childcare for their two young boys, which was also becoming more expensive - but they had found some ways to free up cashflow.
"We've been given options for interest-only, adding on top some of our credit card debt as well, but then it just gets eyewatering, looking at about 8.09 percent with a non-bank lender."
Some of their solutions included stopping payments into Kiwisaver, and finding a lower-interest credit card "because frankly for the last two years, or the last year certainly, we've only really been able to meet minimum repayments on the cost of living".
"We've got about a week to go until we want to to get that new rate locked in, but we're doing just whatever we can ... it's become anxiety-riddling, I'd say it's been really really daunting."
He said there would be many other in the same difficult position.
"We are not the only ones in this boat, it's just serious trouble for a lot of people."
"That's actually, yep, extremely, extremely tough."
There may be hope on the horizon for lower interest rates, with high inflation overseas starting to come back under control, and signs of softening in domestic labour markets.
Commentators including Kiwibank chief economist Jarrod Kerr have even raised concerns the Reserve Bank's moves could go too far, throttling growth.