Over a quarter of mortgages in deferral in 2020 have not yet started making full repayments, according to data from credit reporting firm Centrix.
As reported by RNZ, Centrix figures revealed that of the 80,000 mortgages that were in deferral last year, around 27% had “either been placed into hardship, had their account closed, or were making interest-only payments.”
Read more: Report reveals dramatic increase in mortgages in arrears
Centrix figures also showed that the number of customer accounts in hardship rose by 5% in May – with over two-thirds of these cases connected to either a mortgage or credit card debt.
Keith McLaughlin, managing director of Centrix, told RNZ that an expected increase in interest rates could lead to that figure rising even further.
“I think if interest rates do go up, we will see a new type of person start to move into arrears,” McLaughlin told RNZ, adding that a borrower’s inability to manage rising rates isn’t the only thing that can lead to mortgage stress.
“Personal situations change, and that’s where we do tend [to see] that people do go into arrears, there may be a change in the marital relationship, there may be a change to the family, there may be a new addition to the family, there may be a drop of one income… those tend to be the triggers rather than just somebody over committing,” McLaughlin told RNZ.