File image. Photo: RNZ / Nathan Mckinnon
Financial experts say homeowners do not need to panic in the face of negative equity and rising interest mortgage rates.
This week the Reserve Bank issued warnings about negative equity as house prices drop and rising interest rates in the face of inflation.
Enable Me financial advisor Katie Wesney said headlines on negative equity and high interest rates were scary, but they were affecting only a small proportion of people.
"Generally speaking, it's first home buyers who happened to buy at the peak last year and that is cold comfort for those people, but we have to put it into context," she said.
Loan Market mortgage broker Paulette Trotter said property prices would recover like they did following the Global Financial Crisis.
She encouraged people in negative equity not to sell if they did not have to.
"Your property will improve in value over time," she said.
However, for those needing to sell or increase their lending, Kiwibank head of home and investment products Chris Greig said that was when "value" came into play.
"I think that's where people would have to consider whether that's the right thing for them to do" and why they would "be in a position to do that" he said.
For those facing financial hardship from high interest rates, as long as customers talked to the bank early on, they could usually "assist and help" people through the situation they were in, he said.