Down to earth help for down to earth people

If you ask your parents about mortgage interest rates, they'll probably tell you of a time when people were quite OK with paying 20% or more, so the seven or eight percent rates we're seeing these days don't look so bad to them.

Back in my day mortgages were 20%

The difference, of course, is that house prices have risen WAY more than wages, so a much bigger chunk of our pay is going to the mortgage than ever before. With many of us coming off low fixed rates to rates that are sometimes twice what they were, mortgage stress is a real problem for many Kiwi families.

Step one in dealing with that, of course, is talking to your bank or a financial advisor about getting the best possible deal. Neither will cost you anything, so it's a good place to start.

The reality though is that your new rate is still probably going to be higher and so will your monthly or fortnightly repayments. So where to find the extra cash? There's only so much down the back of the couch!

Bringing it back down to earth

At Money Sweetspot, we've seen that one place lots of families can save money is through a financial reset. What's that?

Basically, it's a way of getting on top of other debts you might have, freeing up cash to manage living expenses and bills, like your mortgage, and getting on with life. Those debts could be anything you're paying high interest on, like car loans, personal loans, short term lenders, credit cards and buy now pay later schemes (if you don't pay off the whole balance).

Here's how it works:

1. We bundle up all your debts into a financial reset loan from $2,000 to $40,000 and pay off everyone you owe money to.
2. You get one new loan, often at a lower interest rate than you've been paying, and make just one regular payment.
3. We also offer free financial education plus incentives for staying on track, and sweet charity rewards. You can read more about that here.

Sweetspot in action: Tina and Dave

Tina and Dave*, like many homeowners, were staring down the barrel of a big increase to their mortgage interest rate. That meant their repayments would go up and they needed to find the cash from somewhere.

When they approached Money Sweetspot, they had other debts adding up to $9,000, with an average interest rate of 24.95%.

After assessing their application, we provided a full financial reset loan at a 13% interest rate, reducing their monthly repayments from $572 to $273. That freed up about $300 a month to go towards their increased mortgage repayments, plus reduced the number of monthly loan repayments they needed to keep on top of.  Bonus: that lower interest rate could mean they clear their entire $9,000 debt faster, freeing up even more cash each month.

Mortgage rate increases will always hurt. Tidying up other expensive debts with a Money Sweetspot financial reset can help you over that hurdle, so you can get out of debt faster and on with life.

*This is an actual customer story but their names have been changed.

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