What does NZ pay to borrow?
The short answer, from Treasury's audited accounts for the year to 30 June 2026:
What these numbers mean
- Debt is Treasury's main measure, net core Crown debt: borrowing minus specified financial assets, such as cash and investments. It does not take off the NZ Super Fund's financial assets ($98.0 billion) or money lent ($27.9 billion).[27][11]
- Net core Crown debt ($186.8 billion) was 40.9% of GDP, the value of everything New Zealand produces in a year.[1][3]
- Total core Crown borrowing, with no assets taken off, was $256.8 billion.[9]
- The interest bill (Treasury's "finance costs") of $9.06 billion is audited. Treasury's September update splits it, unaudited, into $8.70 billion of interest, mostly on borrowing, and a $0.36 billion accounting charge for future costs.[13][44][45]
- The government also earned $3.52 billion of interest on cash it holds and money it lends. This income is not taken off the $9.06 billion bill.[36]
- Per person is the bill divided by 5,357,300 people, the population at 30 June 2026. Nobody is billed this amount.[61]
Debt over time
Treasury's September 2026 forecast: 43.9% of GDP in 2028, then 39.5% in 2031. Forecasts are not targets.[39][34]
The interest bill over time
Treasury forecasts $13.69 billion in the year to June 2031. It says the rise largely reflects the additional borrowings expected over the forecast period
. Amounts are not adjusted for inflation. Treasury's update gives this series from the year to June 2022.[43][46]
What interest rate does it pay?
Averaged over all its borrowing, not just the net debt figure above, the government paid about 3.5% in 2025/26.[calc] This is an estimate: $8.70 billion of interest divided by average borrowing at 30 June 2025 and 2026 ($247.9 billion).[10][9]
At recent auctions, new borrowing cost from 3.19% for short-term borrowing due Jan 2027 to 5.50% for a bond due May 2054. On 29 Oct 2026 it borrowed for about 10 and a half years at 4.99%.[111][108][99]
Why the difference? Most of the debt is in bonds: loans from investors at a fixed rate, repaid on a set date. For inflation-indexed bonds, a smaller part, the amount owed and each interest payment rise with prices.[119] A bond first sold in Oct 2020 pays 0.25% a year until May 2028.[76] As bonds are repaid and replaced, the average moves towards what new borrowing costs at the time. $97.8 billion of bonds at face value (43% of all bonds on issue) fall due by the end of 2031.[94][calc]
Try it: what if the rate changed?
average
2025/26 4.99%
loan to 2037
29 Oct 8%
Interest a year if all $256.8 billion of borrowing cost this rate:
Per person: a year.
A simple illustration, not a forecast: rate × borrowing at 30 June 2026. At 3.50% it differs a little from the $9.06 billion bill ($1,691 per person), because borrowing grew during the year and the bill includes the accounting charge. A new rate would reach all the debt only slowly, as bonds are replaced.[9]
Sources
Treasury's audited Financial Statements of the Government 2026 (8 October 2026) and Pre-election Economic and Fiscal Update 2026 (29 September 2026); New Zealand Debt Management bonds on issue at 30 September 2026 and auction results to 29 October 2026; Stats NZ population at 30 June 2026. Each [number] links to the exact source words; [calc] links to the working. Checked 30 October 2026.