New Zealanders are likely to reduce their level of retirement savings as higher mortgages and rising prices for basic items such as food and energy start to bite.
The ANZ-National Bank this week increased the key two and three-year rates and the ASB increased its floating rate to 10.75%.
Two-year fixed rates were lifted by ANZ-National to 9.7% from 9.5%, and the three-year rate, popular with Otago homeowners, rose to 9.55% from 9.3%.
Those about to refinance a two-year mortgage of $250,000 are likely to face increased payments of about $75 a week.
The Bank of New Zealand and Westpac are reviewing their rates. About 79,000 electricity consumers in Dunedin and Central Otago face higher electricity rates from April 1, after Dunedin City Council-owned Aurora Energy announced increased charges.
Aurora's 9.8% line-charge increase to electricity retailers translated to about a 3.4% increase to consumers, Aurora chairman Ray Polson said.
But a detailed look at the announcement showed that Dunedin line prices would increase on average 8.7%, Central Otago by 9.6% and Wakatipu by 14.7%.
Mr Polson said the increase was much larger than usual because State-owned transmission company Transpower had significantly increased its charges from April 1.
Dunedin financial adviser Craig Myles told the Otago Daily Times yesterday that the ‘‘mortgage belt'' of Otago would be affected by the rising rates and prices.
Reports he had seen this week suggested take-up of KiwiSaver among low to middle-income earners was slowing with high-income earners continuing to sign up, albeit at 4% of income rather than the 8%.
Mr Myles, a director of Myles Wealth Management, expected banks to continue to push up mortgage lending rates, no matter what the Reserve Bank did next week with its official cash rate.
The banks were ‘‘under the water'' on some of their lending - not earning enough between what they paid for finance and their lending rates. However, home buyers in Otago do not seem deterred by rising mortgage rates.
Mortgage Link Otago director Glenda French said in an interview that she remained busy finding mortgages for homeowners across the board - from first-home buyers to those changing houses.
Mortgages in Otago averaged about $250,000. In the main, people were selling to move up, but there was some downsizing.
