Households still borrowing as business failures quietly climb higher
New Zealand mortgage advisers are entering 2026 with a complex backdrop of strong credit demand, mixed arrears trends and rising business liquidations, according to Centrix’s latest January Credit Indicator.
Centrix chief operating officer Monika Lacey (pictured) says Kiwi households and businesses are “hop[ing] for sustained economic recovery after a challenging few years”, but the data show both momentum and strain across different parts of the market.
It’s a similar story across the wider economy: the ingredients for recovery are in place, but the upturn still looks unconvincing, with average living‑cost inflation back near 2021 levels even as superannuitants, renters and low‑income households remain squeezed by power bills, rates and rent.
Credit demand strong, mortgages, and personal loans lead
In January, Stats NZ reported quarterly CPI up 0.6%, pushing annual inflation to 3.1% while December retail spending eased back from November’s peak.
Against that backdrop, Centrix says consumer credit demand “opened the year with solid momentum, rising 9.4% year on year”, driven by stronger mortgage applications and elevated personal loan borrowing over the holiday period.
New household lending strengthened through the December quarter, with “new mortgages… up 14.3% while non‑mortgage lending also climbed 12.0%”, supported by active summer housing markets and borrowers “taking advantage of the lower cash rate to refinance to lower interest rates.”
Personal loans and vehicle finance were key drivers of non‑mortgage growth, while demand for credit cards, BNPL and retail energy softened.
For advisers, the message is that borrowers are still willing to take on new debt – especially secured and personal – even as they adjust to a slow and uneven recovery.
Arrears broadly contained, but pockets of pressure emerge
Overall consumer arrears lifted seasonally to 12.07% in December, with 471,000 consumers behind on payments and 87,000 more than 90 days past due. Centrix notes this is “broadly in line with 2023 levels” and still 0.8% lower year‑on‑year, suggesting household stress remains contained for now.
Mortgage arrears edged up to 1.37% but remain 8% lower than a year earlier, with 21,800 mortgage accounts past due. Credit card arrears rose to 4.0% yet are still 6% down year‑on‑year.
In contrast, vehicle loan arrears increased to 5.8%, sitting 6% higher year‑on‑year, while personal loan arrears climbed to 9.8%. By comparison, “retail energy arrears fell to 4.7%” and telco arrears improved for a fifth straight month, easing pressure on some household budgets.
Business demand stabilises as liquidations spike
Business credit demand “edged slightly higher, rising 0.7% year‑on‑year”, led by hospitality (+38%), education and training (+17%) and retail trade (+13%).
But rising company failures show the recovery is far from complete. Centrix reports company liquidations are now at “their highest level since 2010”, with the sharpest increases in hospitality (+50%), retail trade (+34%) and transport (+27%).
Construction, manufacturing, and property/rental also recorded more liquidations, even as defaults and average credit scores improved in some areas. Agriculture was a notable bright spot, with liquidations down 11% year‑on‑year and stronger credit demand pointing to improving financial health.
For Kiwi mortgage advisers, the data underline the need to segment client books carefully in early 2026 – distinguishing households using lower rates to get ahead from those showing early arrears pressure, and watching SME‑heavy sectors where rising business failures could quickly spill over into personal financial stress.
For more information, read the full Centrix report.
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