Mortgage arrears rose for the second month in a row in November.
Data from the central credit reporting agency Centrix shows there are now 15,000 mortgages in arrears, up 2000 from September.
When the pandemic first struck, concessions were made to allow retail banks to defer mortgage payments for customers in hardship, although interest still accrued on the balance.
Of those who took up the deferral option, 80 per cent had come off, but Reserve Bank data showed $2.6 billion worth of loans remained deferred.
Centrix chief executive Keith McLaughlin said those customers were likely the ones doing it tough.
"From our perspective, the concern leading into March is what's going to happen to the other 20 per cent deferred mortgages because that's probably the most hard-hit consumers out there that are still on the scheme.
"We know that it's probably a 2-3 per cent higher chance of them defaulting than any other mortgage."
McLaughlin said defaults in credit cards and personal loans were also starting to creep up, with arrears up 6 per cent quarter-on-quarter.
He said January and February were typically high default months anyway, and next year that trend would likely be exacerbated.
"There is concern about what's going to happen in the first quarter of 2021."
Meanwhile, overall demand for credit continued to surge to levels higher than what they were pre-Covid.
"[Demand] really started to lift two or three days prior to Black Friday, and while Black Friday was a record day, it hasn't fallen very far since then," McLaughlin said.
"Demand at the moment is running about 103 per cent of what it was pre-Covid. This is largely driven by an increase in e-commerce - being the buy-now-pay-later business, also with retail sales and, of course, property."