“Specifically, 44 per cent of hardships relate to mortgage payment difficulties, with the highest rate seen for those aged between 35 and 39,” Centrix managing director Keith McLaughlin said.
“Hardships are reported to credit reporting agencies by credit providers as part of their monthly CCR (comprehensive credit reporting) upload. Typically, this means the credit provider has approved a financial hardship application, and CCR reporting provides a mechanism to inform other credit providers of this status.”
The percentage of mortgages in arrears showed a slight improvement in March, falling back to 1.48 per cent from 1.51 per cent in February.
The number of homeowners behind on their mortgage payments in March was 22,100, down just 500 from the prior month.
Mortgage arrears were up 13 per cent year-on-year. However, they remain low historically.
Vehicle loan arrears rose sharply to 6.5 per cent in March, compared to 4.9 per cent for March 2023.
Credit card arrears increased slightly to 4.8 per cent but remain low compared to historical levels.
Both buy-now-pay-later and personal loan arrears improved slightly in March, dipping to 9.1 per cent and 9.6 per cent respectively.
Figures released on Monday by Stats NZ showed the cost of living for the average household surged 6.2 per cent in the year to March 31.
Interest payments were most likely responsible for the pain having increased by 28 per cent for the average household over that period, Stats NZ said.
Westpac senior economist Satish Ranchhod told the Herald that “housing costs are still a pretty important squeeze on households’ purchasing power”.
Meanwhile, demand for auto loans and mortgages was down in the first quarter of 2024, according to Centrix.
Consumer demand for auto finance was 17.8 per cent lower compared with the first quarter of 2023, while mortgage demand was down 1.5 per cent.
“Demand for auto loans has fallen off, which could be related to the recent introduction of road user charges and removal of clean car discount for electric vehicles,” McLaughlin said.
“For households and businesses alike feeling the financial squeeze, it’s important to seek professional financial advice to better understand how best to navigate the coming months.
“There are options available to help people get through without compromising their future financial health and suffering in the long-term from the current economic climate.”
