An extension to the six-month home loan deferral scheme is being considered by the Reserve Bank, Finance Minister Grant Robertson says.

Robertson's response came in reply to a Herald query made after Australia's banks yesterday agreed to extend its home loan deferral scheme for another four months on top of the existing six-month scheme.

The RBNZ and the New Zealand Bankers Association agreed in March to a six-month mortgage deferral scheme in New Zealand to those borrowers hit by Covid-19.

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Nearly 60,000 borrowers (59,885) had agreed to a deferral of payments on $20.2 billion of home loans, personal lending, credit card or overdraft debt as of June 30, figures from the NZBA show.

A further 79,166 customers had agreed to reduced loan payments to either interest-only or a reduction in principal and/or interest repayments on $24b of debt that was either home loans, personal lending, credit card or overdraft debt.

In a statement Robertson said the Reserve Bank had advised him that it was still assessing options for the future of the loan deferral scheme and expected to make a decision within the next month.

"The bank advises me that an extension is one of the options under consideration, but not the only alternative."

An RBNZ spokesman said it was still assessing options for future regulatory treatment of the loan deferral scheme in New Zealand, and expects to make a decision within the next month.

"An extension is one of the options under consideration, but not the only alternative. While the Australian and New Zealand loan deferral schemes are broadly similar, there are some differences between the two jurisdictions with respect to the regulatory framework around defaults and loan restructuring."

He said take-up rates of the deferral schemes also differed between the two countries.

"... and so, in partnership with the country's banks, we will need to determine the best course for the New Zealand context."


New Zealand Bankers' Association chief executive Roger Beaumont said mortgage deferrals could provide customers in need with immediate relief at an uncertain time.

"Banks are responsible lenders and suggest customers only defer all loan repayments if they need to."

Beaumont said before making any decisions to extend mortgage deferrals banks would need to assess the customer need.

"It would also involve discussions with regulators and credit reporting agencies on any impact to responsible lending obligations and how the deferred loans are treated."

Sometimes described as a "mortgage holiday", the Government-approved scheme enables banks to allow customers to reduce or suspend mortgage repayments for up to six months, without the Reserve Bank considering those loans to be non-performing when assessing bank solvency.

The interest on the loans continues to accrue.


The loan deferrals initially caused some confusion among consumers because of the "holiday" connotations.

But experts have advised people against taking them unless they really need to because the interest continues to accrue and is added to the loan meaning people may need to increase their payments on their mortgage after they come off the holiday or take longer to pay off the debt.

There were also concerns that the deferrals would put a black mark on applicants' credit files potentially making it harder or more expensive for them to borrow money in the future, but banks decided against this.

Banks and mortgage brokers say some borrowers on loan deferrals have started to come off them already but there are no concrete figures on it yet.