How can you prepare financially for mortgage rate rises?

It’s no secret mortgage rates are on the increase - perhaps you’ve already experienced a rise. But how can you prepare your budget for future increases? Financial adviser Lisa Dudson offers her top tips.

Plan now

Failing to plan is planning to fail. Don’t wait until the time you’re about to refix to prepare. The sooner you start preparing, the better. If you share a mortgage, start the conversation with the other person/people today about what changes you’ll make to manage the increase - that’s probably one of the most critical things.

Sort your budget

It’s going to cost you more, so you’ll need to think about how you can afford that extra money - where is it coming from? For some people it will be easier, for some it will be a real challenge. Go back to your budget and assess what you can trim, so you can afford the increases when they come. There are plenty of areas you can look at “trimming the fat” - transport, utilities, food spending or subscriptions. Look at ways you could increase your income too, as that brings a lot of benefits. 

Pay what you can now

Pay a higher repayment amount now (perhaps to a mortgage rate of 4% or 5%) if you can - then you’re covered and the stress has been removed. If that’s too hard right now, try increasing the amount you pay slightly every repayment cycle. You can knock some years off your mortgage too with this approach. Talk to your lender to find out if there is an extra repayment limit before you start any increases.

Stagger rates

Splitting your mortgage (for example having different portions on different terms and rates) averages out your risk. Rather than everything coming off a low rate and going onto a high rate, you’ve got the maturity dates staggered, so it averages it out. You’re not getting one big change all at once.

Get advice

If you’re feeling stuck, consult an expert. This could be a financial adviser or a mortgage broker. Be careful who you go to for financial advice - be wary of Facebook groups and other forums. If you’re unable to manage any mortgage increases, the government’s Money Talks website is a great starting point to connect with a free budgeting adviser. 


Information correct as at March 2022. Pie Funds Management Limited is the issuer and manager of the JUNO KiwiSaver Scheme. Click here for our Product Disclosure Statement. Any advice is given by Pie Funds Management Limited, and is general only. It relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees if you act on any advice. As manager of the Scheme we receive monthly fees that are determined by your balance and whether you are 13 years or over. We will benefit financially if you invest in our products. We manage any conflicts of interest via an internal compliance framework designed to ensure we meet our duties to you. For information about the advice we can provide, our duties and complaint process and how disputes can be resolved, visit www.junofunds.co.nz. All content is correct at time of publication date, unless otherwise indicated. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. Please let us know if you would like a hard copy of this disclosure information.