New Zealand home owners with mortgages appear to still be demonstrating resilience in the face of big rises in interest rates, figures in the New Zealand Banking Association's retail banking data insights for the six months to June show.
"Over 43% of home loan customers were ahead on their loan repayments, compared to 1.4% of home loan customers behind on their repayments. That shows that many people with home loans are managing relatively well. It means that those paying more than their minimum repayments likely built in a cushion in case their circumstances change. It also means they’re paying off their debt faster," NZ Banking Association chief executive Roger Beaumont said.
In terms of the details, the 1.4% of customers behind on their loan repayments as of June 2023 compared with 1.23% of customers behind in the previous six month period ended December 2022.
The number of customers ahead with payments has dropped. The 43.7% ahead as of June 2023 was down from 44.7% as at December 2022.
NZBA said of all banking customers in the six months to June 2023, 9,080 applied for hardship status, an increase of 84.9% compared to the last reporting period. The hardship status was granted to 5,655 customers over the six month period, an increase of 31.9% from the last reporting period. NZBA pointed out that there are 9.5 million unique customer accounts.
And during the latest period, 11,090 home loans switched from principal and interest to interest-only repayments. In the previous six months to December 2022, there were 12,120 home loans that made the switch.
"Banks are here to help, and anyone experiencing financial difficulty should contact their bank as soon as possible. The sooner you talk to your bank, the more likely they’ll be able to help," Beaumont said.
During the six months to June 2023 there were 40,438 new home loans during the period, which was a decrease of 11.4% from 45,628 in the six months to December. The average value of those new loans was $382,913 - which was an increase of 2.6% on the figure in the six months to December 2022.
Of the 40,438 new home loans opened, 26% were issued to first home buyers and the average-sized loan for the FHBs was $546,176, an increase of 11.1% from the last reporting period.
NZBA said as of June there were nearly 1.25 million home loans across 1.08 million customers. The average value of all home loans was $323,463.
In terms of credit card debt, NZBA said for the six months to June 2023, 65.6% of cards were paid off in full without incurring any interest cost. That percentage is actually down slightly on the 67.4% figure in the six months to December 2022.
NZBA said while the number of credit card customers as of June 2023 decreased to 2.21 million (a decrease from 2.23 million), the number of credit cards increased by 1.4%.
The average monthly spend per credit card account slightly decreased, to $2,004 from $2,121 as of December.
"Over 65% of people with a credit card are paying off what they owe without incurring any interest cost. That shows a high level of financial capability among credit card holders," Beaumont said.