Latest / That Home Loan Hub / Beyond the Headlines: What Budget 2025 Means for Your Financial Future

Transcript

Beyond the Headlines: What Budget 2025 Means for Your Financial Future · That Home Loan Hub

• 0:10
  Speaker 1: Kia ora and welcome back to the show.
• 0:11
  Speaker 1: It's budget week here in Aotearoa, and whether you love politics or avoid it like a bad mortgage rate, this is the episode for you.
• 0:18
  Speaker 1: I'm not here to drown you in economic jargon.
• 0:21
  Speaker 1: I'm here to break down what the budget might actually mean for your mortgage, your kiwi saver and your dream of owning a home.
• 0:28
  Speaker 1: So let's start with the big question Will the 2025 budget make it easier or harder to buy a home in New Zealand?
• 0:36
  Speaker 1: Well, the answer is always, like in finance, it depends.
• 0:41
  Speaker 1: But here is what I see from the mortgage advisor's chair Number one will the interest rates come down faster?
• 0:49
  Speaker 1: Look, the government's economic outlook is predicting that it may go down, but that could influence the Reserve Bank's decisions on the official cash rate later this year.
• 1:00
  Speaker 1: The way I see it, if the budget cools inflation think lower spending, tighter fiscal control then interest rates may drop faster.
• 1:10
  Speaker 1: That's good news.
• 1:11
  Speaker 1: If you're about to refix your mortgage or trying to buy a house right now, that's good news.
• 1:15
  Speaker 1: If you're about to refix your mortgage or trying to buy a house right now.
• 1:18
  Speaker 1: However, if there is a lot of new government spending, especially on infrastructure or wage increases, we could see the Reserve Bank hold or even hike again, and that keeps the mortgage rates higher and longer.
• 1:30
  Speaker 1: So it could swing either way and we just don't know which way it's going to swing.
• 1:37
  Speaker 1: Now, is there any real help for the first-home buyers?
• 1:39
  Speaker 1: I was looking closely for the targeted support for the first-home buyers, things like the first-home grant that disappeared last year, adjusting house price caps or new KiwiSaver incentives.
• 1:49
  Speaker 1: Now, if those weren't there, that's a missed opportunity.
• 1:52
  Speaker 1: Home ownership is still out of reach for many Kiwis and those few tweaks would have made the difference.
• 1:59
  Speaker 1: But unfortunately we don't see this happening just yet.
• 2:04
  Speaker 1: And number three is usually around the lending, so the lending rules and indirect impact that it may have.
• 2:10
  Speaker 1: This is something you won't see on the news, but what the government announces can change how the banks think.
• 2:17
  Speaker 1: So, for example, if there is a strong investment in jobs and income support, lenders might view households as more stable.
• 2:25
  Speaker 1: That could ease up some of the strict income servicing criteria.
• 2:28
  Speaker 1: And we have seen it in the last year.
• 2:30
  Speaker 1: The servicing rates have been going down.
• 2:33
  Speaker 1: But if things feel uncertain, like rising unemployment or shaky policy, the servicing rates have been going down.
• 2:36
  Speaker 1: But if things feel uncertain, like rising unemployment or shaky policy, the banks tend to tighten up.
• 2:40
  Speaker 1: It's all interconnected and, again, we have seen that happen before.
• 2:45
  Speaker 1: A couple of years ago.
• 2:46
  Speaker 1: The servicing rates were climbing up, making it unreachable for a lot of Kiwis to buy the house.
• 2:53
  Speaker 1: So what am I telling my clients right now?
• 2:55
  Speaker 1: My advice If you're fixing your mortgage, stay informed.
• 2:59
  Speaker 1: The next OCR announcement is coming in a couple of weeks time and we'll be able to see how it responds after the budget.
• 3:07
  Speaker 1: If you're planning to buy, use this momentum to straighten your position.
• 3:11
  Speaker 1: Sort out your deposit, clean up your credit file and talk to an advisor early.
• 3:14
  Speaker 1: And if you're already in your home, sort out your deposit, clean up your credit file and talk to an advisor early.
• 3:15
  Speaker 1: And if you're already in your home, think about resilience.
• 3:19
  Speaker 1: How secure is your own job, your budget, your buffer?
• 3:23
  Speaker 1: I hope this has been helpful for you.
• 3:25
  Speaker 1: And look, this budget might not change everything overnight, but it sets the tone.
• 3:29
  Speaker 1: I'll be keeping an eye on how lenders respond and I'll bring you up to date as the dust settles.
• 3:34
  Speaker 1: Until next time, stay informed, stay empowered and, as always, keep making smart money moves.
• 3:39
  Speaker 1: Come and join me at the webinar every fortnight on a Thursday.