The Reserve Bank of New Zealand has released its latest Financial Stability report, revealing that rising interest rates are placing a growing burden on the financial well-being of New Zealanders.

According to National Finance spokesperson Nicola Willis, the report is a concerning insight into the state of the country’s financial health.

The report highlights the significant impact that rising interest rates are having on Kiwis who have borrowed heavily in recent years.

Despite falling house prices, mortgage arrears are on the rise, putting families under increasing financial pressure.

The report suggests that a quarter of outstanding mortgage debt was fixed during the period of ultra-low interest rates in 2021.

This means that many New Zealanders have yet to feel the full effects of rising interest rates, which are expected to continue to climb in the coming months.

Willis warns that many families will struggle to keep up with the cost of higher interest rates, as wages struggle to keep pace with inflation.

The report indicates that current interest rates exceed stress testing requirements set during the period of ultra-cheap lending, further exacerbating the financial pressure on households.

According to Willis, the current state of the country’s finances is a direct result of the Government’s failure to control inflation and interest rates.

Despite warnings that unchecked government spending and economic policies would lead to further inflation, the Labour government failed to take appropriate action.

With a new Prime Minister in place, Willis is calling for a real economic plan to address the growing financial strain on New Zealanders.

“The National party has put forward a plan to fight inflation and lift incomes for all, including controlling government spending, returning the Reserve Bank to a single mandate” Willis said.