A homeowner has revealed she is paying $60,000 a year in mortgage repayments after her interest rate doubled.
Victoria Harris, who is a financial expert and founder of The Curve – an education platform providing investing and finance content for women – made the shocking admission on Saturday.
In a video shared TikTok, Ms Harris explained to her co-host Sophie Hallwright she was initially paying $27,000 for her property.
In a video shared to The Curve’s TikTok account on Saturday, Ms Harris explained to her co-host Sophie Hallwright she was initially paying $27,000 for her property
‘So, I was paying $27,000 six years ago at a 3 per cent mortgage rate,’ Ms Harris said.
‘Now I’m paying at six and a half per cent. I’m now paying about $60,000 a year. I’m paying now more than double what I was paying.’
Ms Hallwright appeared gobsmacked and stared at her co-host with her mouth agape after she revealed the total amount of her mortgage repayments.
The New Zealand-based duo received more than 350 comments, with many criticising Ms Harris.
Social media users claimed Ms Harris bought her property at a time of record low interest rates and should have expected her repayments to increase when bank’s change their rate.
‘I don’t get it – do people get loans expecting to pay the lowest interests rate the world has seen in the last 20 years forever,’ one person commented.
‘Yep. That’s what can happen with interest rates. They can vary dramatically due to the economy. Why is she surprised?,’ another person wrote.
‘People need to be really careful when they initially take out the loan to see what would the repayment be for x% to decide whether that would be ok,’ a third added.
Ms Harris replied claiming she is ‘not complaining’ but is ‘educating’ The Curve’s followers as to the impact of rising interest rates.
‘I’m single and saved my entire deposit & pay my mortgage myself. Not over extended, just stating facts,’ Ms Harris wrote.
The video comes after New Zealand’s economy slipped into a recession after recording two consecutive quarters of negative growth.
The Reserve Bank of New Zealand (pictured) led the world in raising interest rates to combat post-pandemic inflation, increasing the cash rate 12 times since October 2021
The economy contracted 0.1 per cent during the three months through to March, following a 0.7 per cent contraction in the previous quarter, Stats NZ revealed on June 15.
The Reserve Bank of New Zealand led the world in raising interest rates to combat post-pandemic inflation, increasing the cash rate 12 times since October 2021.
The RBNZ raised the cash rate from 0.25 per cent to 5.5 per cent and indicated last year a recession would help bring inflation back within its 1 to 3 per cent target.
In comparison, The Reserve Bank of Australia hiked interest rates to an 11-year high of 4.1 per cent on June 6.
It marks the 12th rate rice since May 2022 and is the most rapid successive increase since 1989, with loan repayments surging by 62 per cent in just 13 months.
Reserve Bank Governor Philip Lowe said the rises must continue because inflation was still too high.
‘Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,’ Mr Lowe said in a statement.
The latest 0.25 percentage point increase means a borrower with an average $600,000 mortgage will pay an extra $97 every month.
Monthly repayments will climb to $3,730, up from $3,633, as a Commonwealth Bank variable rate for a borrower with a 20 per cent deposit rose to 6.34 per cent, up from 6.09 per cent.
Reserve Bank of Australia Governor Philip Lowe said inflation was still too high following the latest interest rate rise
The Reserve Bank of Australia hiked interest rates by another 25 basis points on June 6 – marking the 12th increase in little more than a year
The average borrower will now be paying $17,088 more a year than they were 13 months ago.
Dr Lowe said this would be far from the last rate rise even though annual inflation in the March quarter had moderated to 7 per cent, down from a 32-year high of 7.8 per cent in the December quarter.
But it’s still well above the Reserve Bank of Australia’s two to three per cent target, with Dr Lowe expecting the consumer price index to remain high for two more years.
‘Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve,’ Dr Lowe said.
