Nearly 11,000 Kiwis missed their mortgage repayments in August, in addition to the 83,829 mortgage deferral requests lodged since the end of March – equivalent to 13% of all mortgages in New Zealand, according to home loan comparison site Finder.
Finder’s analysis of Reserve Bank of New Zealand (RBNZ) data revealed that around 10,905 homeowners were in arrears with their mortgage repayments as of August 07, with over 240,000 payments missed since April.
Kevin McHugh, Finder’s publisher in New Zealand, said thousands of borrowers were entering into arrears every week.
“The mortgage market shows just how much financial stress New Zealanders are experiencing. This is the fourth month in a row that a huge number of households were unable to pay their housing bill on time and in full – it’s a grim situation,” McHugh said.
The RBNZ decided to extend the mortgage deferral scheme until March 2021 in response to the accumulating mortgage debt.
McHugh commented: “The Reserve Bank’s decision to extend payment deferrals until next March will bring much-needed relief to homeowners.”
He added that the continued economic fallout of COVID-19 could lead to a debt spiral if Kiwis don’t act in time.
“Banks have supported borrowers with options like interest-only terms or deferred payments for up to six months, but some of the customers are still unable to afford their regular repayments. With late fees tacked on, these borrowers may be even less likely to afford their next repayment, perpetuating a vicious debt cycle,” he continued.
“Borrowers who have lost their income need to contact their lender immediately to avoid ending up in arrears.”