Jeremy Andrews: Key Mortgages broker on the number of Kiwis in arrears, upcoming OCR announcements

A mortgage broker is advising people to hedge their bets as uncertainty continues over upcoming Official Cash Rate announcements.  

Centrix is hoping the Reserve Bank will make more cuts, as its latest Credit Indicator report shows almost half a million New Zealanders are behind on repayments, with consumer arrears levels up 1.3%. 

Key Mortgages' Jeremy Andrews told Andrew Dickens people shouldn't necessarily hope rates will drop.  

He suggests fixing loans midterm, adding he's never seen so many people with floating rates.  

The next OCR announcement is due in a fortnight on February 19. 

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Episode Transcript

Speaker 1 (00:00):
It is five twenty one. So Kiy's is still waiting
to see a shift in the economy. We know that,
we feel it, and now we've got facts. New Centric
data out this morning shows reported financial hardship increased nineteen
percent in the past year, and most of those cases
were down to mortgage repayment issues. The mortgage is killing us.
So I've got a mortgage broker on the line right now.

(00:21):
He's from Key Mortgages. It's Jeremy Andrews.

Speaker 2 (00:23):
Hello, Jeremy, Good morning, Andrews.

Speaker 1 (00:26):
Are you surprised by the nineteen percent figure.

Speaker 2 (00:31):
It's not too surprising, could have been higher. I yess,
A lot of I guess a lot of that's yeah,
A lot of that is from mortgages, people going through
kind of hardship.

Speaker 1 (00:43):
So, in other words, you know that the economy is
a bit tanky at the moment, and so you were
expecting a nineteen percent. It's still not a good number, though,
A it's not.

Speaker 2 (00:52):
It's been pretty hard out there, especially businesses. Last five
years or so, it's been a pretty hard run. It's
been COVID supply chain issues, is lockdowns rates after that,
rates have gone from kind of record loads to the
highest a lot of those new businesses would have seen.

Speaker 1 (01:11):
And all those people are wanting it to improve soon.
And can you see improvement in the next coming months
or is this going to be a medium term thing?

Speaker 2 (01:22):
So from the interest rate perspective, yeah, that's that is
slowly getting better, but it's not It's not going to
be a magic turnaround. I think that the hardship levels
there is still going to continue on for But there's
a lot of hits out there still just rates really high.

(01:42):
It was still still reduced, I guess as people buyers
and consumers are still struggling to afford things and spend
as much as they used to do.

Speaker 1 (01:52):
Well, here's the thing though, here's the thing though. The
OCN is coming up, and yesterday all the news was
about Trump's tariffs and suggesting that maybe too dramatic drop
in the in the interest rate might not be in
our in our favor, and therefore the interest rates could
stay high for a while. So there are a lot
of people out there right now with mortgages thinking to themselves,
what on earth do I do? What would you what

(02:13):
would you suggest?

Speaker 2 (02:16):
Uh? Yes, So we've seen quite a bit of changes
in the last six months the osier's gone. It's gone
from kind of not planned to reduce them to quite
quickly reducing. But the fixed rates maybe haven't come down
quite as much as people were hoping or as quickly.
It's just in the last week there's been quite a

(02:39):
bit more dramatic shifts. So we're now getting interest rates
kind of down around the kind of early to mid
fives or that kind of short, short term. I'll probably
suggest that most people, yeah, heedge your bets, don't necessarily
just hope that rates just can continue to free fall
and keep dropping, maybe fixing some of your loans or midterm.

(03:04):
A lot of people, a lot of people were actually
holding off and floating over the last six months. I
don't think I've ever seen so many people on floating
just hoping for rates to really drop.

Speaker 1 (03:17):
Well, I'll take that. I'll take that as a vote
of confidence by the New Zealand people to go into
floating because they believe that things are going to get better,
because just a month or so ago, the one year
fixed rate was the go for everybody. Now, thank you
so much. Jeremy Andrews. Jeremy is a mortgage broker from
Key Mortgages.

Speaker 2 (03:34):
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