“Swap spreads right now, over the two years, they’re probably around 4%, a little over 4%.

“So the banks are probably making about 2% on those, whereas we’re seeing the variable rate near 4. So you’re definitely seeing it more on the variable rate mortgage.”

Carter said many Kiwis will not have noticed the increase because OCR has been steadily declining until recently.

“You probably don’t notice too much if your interest rates go down.

“On the variable rate, you pay. You feel a little richer.

“The fact that margins are going up, you don’t really notice it, but now that it’s happening, interest rates are going up. That’s when you really feel a pinch in your pocket.”

Carter said while 4% doesn’t sound like a lot, it could mean the difference between paying off your home loan in 20 years versus 30 years.

“We’re thinking of, you know, a young couple that’s starting out, they’re buying a house. They’re going to take out a $1 million mortgage. And that 2% difference in the spread in the margin changes, that’s going to be more than $600,000 difference in interest payments over the term of the mortgage.”

He urged Kiwis to negotiate with their banks to ensure they got the best deal.

“I guess like all things in your finances, know what you’re spending your money on,” he said.

“Negotiate where you can. Banks will negotiate their adjustable rate mortgages. So have that conversation with them. Watch out for pennies.

“But also keep an eye out for those expensive items, as they will add up over time.”

That’s not the only thing costing Kiwis more money right now. New Zealand is in the grip of a cost of living crisis with high inflation driving up the prices of goods and services.

In response to rising inflation, the Reserve Bank is raising interest rates, putting even more pressure on already stretched budgets.