Mortgage arrears trending higher: credit bureau

There's been a significant increase in the number of borrowers who are struggling to keep up with their mortgage repayments, according to comprehensive credit reporting data from Illion. 

The share of home loan accounts more than 30 days past due (i.e. at least one repayment behind) has risen from 0.51% to 0.63% over the past year.

At the same time, the share of accounts more than 90 days past due (i.e. at least three repayments behind) has risen from 0.26% to 0.34%.

“The steady increase in repayment stress has now been observed for at least the past 12 to 18 months,” Illion said.

Five tips to stay on top of a mortgage

Reduce expenses. Borrowers should review all their credit card and bank statements from the past year and look for opportunities to reduce or eliminate unnecessary spending. Savings could be redirected to their home loan repayments.

Use cash. Studies show that people who pay with cash, rather than plastic, spend less, as the spending feels more real. 

Eliminate high-interest debt. Paying off credit cards and personal loans can significantly reduce a person’s monthly expenses.

Contact MoneyTalks. The Government's free financial counselling service helps New Zealanders who need assistance with budgeting and debt management.

Think about refinancing. A mortgage adviser, like me, can help a borrower reduce their monthly repayments, by potentially switching them to a lower-cost loan or extending their loan term.

Are any of your clients struggling to keep up with their mortgage? If so, you’re welcome to pass on my details. I’d be happy to chat with them and explain their options.