The average fixed two-year mortgage rate has risen from 2.53 per cent in July 2021 to 5.47 per cent today, according to interest.co.nz.
Households' interest costs haven't roughly doubled over the past year like mortgage rates have, because households will only experience higher mortgage rates when they come to refix their mortgages.
Indeed, RBNZ data shows the average interest rate across the country's stock of mortgage lending was only 3.36 per cent in May. This is below the average rate in May 2020 (3.84 per cent).
This shows mortgage holders, and the economy more generally, are yet to really feel the pain of higher interest rates.
The RBNZ acknowledges it takes between 18 months and two years-plus for its monetary policy decisions to fully take effect.
The new Stats NZ household living-costs price index data also shows households that rent spent 4.9 per cent more on rent in the June 2022 quarter versus the June 2021 quarter.
The rise was most acute for Māori and superannuitants.
Renting households typically spend a larger portion of their incomes on rent than owner-occupiers spend on interest costs.
In June last year (the latest available Stats NZ data), beneficiaries spent 30.2 of their incomes on rent, while superannuitants spent 7.2 per cent on rent and Māori, 19.5 per cent. Middle income earners (quintile 3) spent 15.9 per cent of their incomes on rent.
Middle income earners only spent 5.5 per cent of their incomes on interest in June 2021. This portion will be higher now that interest rates are up.
Below is a summary of the different types of living cost increases experienced by all households between the June 2021 and 2022 quarters.
