Western Bay homeowners are being warned to brace for further interest rate hikes and prepare for bigger monthly repayments on their mortgages.
Yesterday the Reserve Bank raised the official cash rate (OCR) to 3 per cent in a move designed to cool the heated housing market and control inflation. It prompted economists to warn homeowners to prepare for further home loan interest rate hikes, following a previous quarter-point jump in March.
The latest rise comes amid new Roost home-loan affordability figures showing Tauranga housing affordability worsened last month.
The report measured the percentage of after-tax pay needed to service an 80 per cent mortgage on a median-priced house.
Affordability worsened from 58.2 per cent in February this year to 60.9 per cent in March, compared with 54.7 per cent a year ago.