Refix rates are trending down and headlines are describing inflation as “easing”, so why is Kiwibank staging a public meltdown? Its latest piece, Inflation creeps above 3%, and it’s the dirty details that creep us out the most, digs into the parts of the inflation story that still look uncomfortable for households and investors.

The bank’s message is clear: sure, the top line looks great but things are still looking pretty ugly under the hood. And the big takeaway for investors is not “job done”. It is “pay attention”.

1. We are still taking the same risk twice

Kiwibank acknowledges that inflation is heading in the right direction and that interest rate cuts are on the horizon, but it is clear that the fight is not over. For investors, the problem is that two major parts of your world still depend on the same moving piece: the interest rate cycle.

You are exposed through your mortgage, whether you are floating, fixing for a short period, or about to refix. You are exposed again through a housing market that moves largely because of changes to interest rates and borrowing power. Even if your rate comes down over the next year, most of your risk remains concentrated in one place, the Official Cash Rate and how the Reserve Bank responds to stubborn inflation.

Action you can take now:
  • Open your last bank statement and work out how much cash you have left after paying the mortgage, rates, insurance and a 5% maintenance allowance. If it is less than $250 per month per property, treat that property as “high risk” and put it on your watchlist.
  • Take one property and run a quick refix scenario at 1 to 1.5 percent above...