You might have moved back home to save money.
You spent more nights in, and fewer nights out.
It was hard, but you did it.
The bank thinks you’ve done a great job, too, and has given you the green light.
According to interest.co.nz, around this time in 2018, mortgage rates were at 4.61 per cent. Your bank might have also been running a special.
You bought a house. You take a punt and fix the rate for two years.
Life carries, on and two years later, it’s time to refix. Hurrah, you’re in luck. Interest rates have dropped to 3.54 per cent.
You think this is a great deal and you fix it for four years.
You’re due to refix again in about a year’s time.
Regarding your mortgage, your finances are in the pink of health.
But a pandemic hits, and the economy spirals.
There’s a labour shortage crisis, inflation has caused a cost of living crisis and supply chain issues have amalgamated into bad news for homeowners.
Interest rates today are more than 6 per cent - some are over 7 per cent. You’re praying to the economy gods the rates ease off by the time your fixed interest rate term expires.
If you recognise this scenario, you could be feeling a bit uncomfortable, if not stressed right now.
We spoke to homeowners who know all too well what this is like.
Saphire Pohatu, of Tauranga, had a 2.49 per cent interest rate end earlier this month, refixed for three years on 6.49 per cent.
Rotorua mum Amanda Wallace said the cost of living and paying the mortgage was “expensive and very stressful”.
Monthly payments had climbed from $1500 a month to about $2000.
I agree, it’s an anxious time. One expert says inflation was forecasted to remain around 7 per cent going into 2023.
The key is, if you think you may be in danger of defaulting on your mortgage, to talk to your bank as soon as possible and take action.
It may be time to reassess income and expenses and look to cut costs. You might even have to pull out the two-minute noodles again.
But at least you’ll have a plan, and you’ll be in your own home.