Home dreams fade as rates rise

Monday 13 September 2004

As interest rates and house prices rise, more families are falling behind in their dream of buying their first home.

By The Landlord

More bad news for borrowers came yesterday when Reserve Bank governor Alan Bollard announced the official cash rate would rise for the fifth time this year to 6.25 per cent.

Banks usually follow suit within days by raising mortgage rates, which are now tipped to head toward 9 per cent.

The double hit of rising house prices and interest rates was making it harder to get into the market and was prolonging the process because fewer people seemed to be selling, Mrs Nicholas said.

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