Recent reports have warned of a 'mortgage bomb' that could blow up - and a growing number of people unable to pay back debts. Is the story as explosive as some headlines would have you believe?

Recent reports have warned of a 'mortgage bomb' that could blow up - and a growing number of people unable to pay back debts. Is the story as explosive as some headlines would have you believe?

"Could you find an extra $1600 a month in the household budget if you had to?" Lisa Owen asked Checkpoint listeners on RNZ National last Monday.

"That is the sharp end of the cost of living crisis for some Aucklanders - and that's on mortgage payments alone," she said, citing new numbers from Westpac.

Many mortgages were fixed for two years in 2020 and 2021 at interest rates roughly half those on offer now - and when house prices were surging. What Lisa Owen dubbed 'The Great Refixing' could mean eye-watering leaps in monthly repayments - and not only for Aucklanders.

This week, Newsroom reported a new survey saying 3 percent of mortgage-holders "could be facing the very real possibility of being forced to sell a property over the next year", according to the latest banking survey of just under 1100 people by research firm Horizon.

That would mean about 42,000 home loans were in trouble, according to Newstalk ZB.

BusinessDesk reported 70 percent of the same survey's respondents said they were "concerned they may not be able to afford payments" when they renew mortgages at current or higher rates.

In June, National Party deputy leader and finance spokesperson Nicola Willis kicked off the party's annual conference warning of a looming "mortgage bomb".

"The whole economy will shudder if it goes off," she said.

In her column in Wellington's daily The Post last weekend, former National Party press secretary Janet Wilson called it "mortgage Armageddon" with "steadily increasing numbers of people in arrears".

But how many?

"When you apply for a mortgage at those very low rates on offer through the pandemic, chances are you would have been tested at rates that are closer to where we're at now," Westpac's Satish Ranchhod told Checkpoint this week.

"The economy's in good shape ... and people have still got some buffers that are helping insulate them from that pain that's coming through from mortgages, as well as other living costs," he said.

"There's definitely more signs of stress but it is definitely not unmanageable," ANZ Bank chief executive Antonia Watson told Newstalk ZB earlier this month. …

Go to this episode on rnz.co.nz for more details