Home loan enquiries rise 14% but new mortgage approvals fall, Centrix finds
New Zealand mortgage arrears are at their lowest level in almost four years, but approvals of new home loans have fallen sharply, despite more borrowers shopping for finance, according to Centrix’s October Credit Indicator.
Residential mortgage arrears held at 1.19% in September, with 19,600 home loan accounts behind on payments. That’s down 13% on September 2025 and the lowest rate since December 2022.
The figures come as inflation eased to 3.7% in the September quarter and the Reserve Bank of New Zealand (RBNZ) held the official cash rate at 2.75% on 28 October in a 4–3 vote, with all members agreeing tighter policy is likely, subject to the outlook.
Enquiries up, approvals down
Overall consumer credit demand was 4.9% below last year on a three-month rolling basis, but mortgage enquiries rose 14.4%. Even so, approved new mortgages were 16% lower in the September quarter than a year earlier. Weaker approvals pulled overall new household lending down 14%, while non-mortgage lending held steady, supported by vehicle finance.
Real estate agents are seeing a similar pattern. In the latest NZHL Property Report, a net 30% of agents reported more first-home buyers in the market, but economist Tony Alexander said many buyers were using the election as a reason to hold off.
Arrears improve, but hardship climbs
Home loan repayment performance has improved. On a seasonally adjusted basis, mortgages 1–29 days past due fell 11% on last year, and those 90 or more days overdue dropped 14%.
Across all consumer credit, 10.88% of credit-active borrowers were behind on payments in September, up slightly from 10.74% in August but 9.3% lower on an annual basis.
Mortgages make up 38% of all hardship cases, and overall hardship accounts rose to 15,300 in October, up 7.8% on a year earlier. Personal loan hardship rose 32% and is now more than double its 2023 level, while consumer credit defaults were 21% higher than a year ago.
“While the improvement in consumer arrears is encouraging, rising hardship and business failures show that financial pressure has not eased for everyone,” said Monika Lacey (pictured), chief operating officer at Centrix.
Business failures climb
Company liquidations rose 18% to 3,173 over the 12 months to September. Construction accounted for the most, at 790, while liquidations rose 41% in hospitality and 53% in retail.
Lacey urged borrowers under pressure to act early.
“With borrowing costs remaining elevated, households and businesses concerned about meeting repayments should speak with their lender or a trusted financial adviser early to understand their options,” she said.
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