Commissioner says OCR debate needn’t be cause for concern
28 July 2011
Kiwis should take their time and review their own financial situation and not be spooked by the debate surrounding today’s Official Cash Rate (OCR) announcement, according to the Retirement Commissioner.
Reserve Bank Governor Alan Bollard has announced that the OCR will remain unchanged yet speculation about tough times ahead continues.
Retirement Commissioner Diana Crossan says ongoing reports about rising mortgage interest rates, and reports of record inflation and high petrol and food prices are putting increased pressure on household budgets.
“It’s easy to be rattled by all the doom and gloom talk, and to feel alarmed by inflation surges and talk of upcoming OCR increases. But the way to deal with the uncertainty is to take control of your own finances.
“If the OCR rises later in the year it could lead to an increase in mortgage interest rates but it’s only going to affect you if you have a floating interest rate or if your fixed term mortgage is about to expire. So, if that’s you, take a look at what a rise in interest rates will actually cost you and how that fits with your spending plan. That way you’ll be prepared if, and when, interest rates do rise.
“Sorted.org.nz has a Mortgage calculator that makes this easy. Many homeowners may find that a rise in interest rates while not welcome, is manageable,” she says.
Ms Crossan says she is urging people to take charge of their financial planning so that changes in the economy don’t catch them out.
“No matter how much money you have, everyone can benefit from a spending plan. Make sure you understand how much money is coming in and how much is going out. Take charge so that you remain in control,” she says.
Home-owners can check the impact of interest rates changes by using the mortgage calculators at sorted.org.nz.
For more information contact
04 801 9485 or 027 203 3172