Summarised by Centrist
The Spinoff is reporting that about 22,600 mortgage accounts were past due in February of this year. That’s up by nearly a fifth year-on-year. And while the vast majority are still making their payments, increased layoffs, high interest rates and a cost of living crisis doesn’t mean people aren’t struggling.
Anecdotes are emerging of homeowners skipping insurance payments in violation of their mortgage agreements in order to pay the bank.
Overall, financial hardship increased year-on-year by more than a quarter. About 44% of all hardships are tied to “mortgage payment difficulties” according to reporting by The Spinoff.
North Islanders appear to be getting the worst of it. The top ten regions of loan arrears of any kind are in the North Island, according to credit bureau Centrix, with Kawerau, Wairoa, and South Waikato seeing significant numbers of late payments.
Although the Reserve Bank of New Zealand (RBNZ) has publicly stated a plan to hold rates until 2025, many anticipate earlier cuts due to escalating financial pressures.
The Financial Stability Report in May could be a turning point. It is expected to reflect the increasing trend in loan arrears and potentially prompt a change in the RBNZ’s tone.
