Subj : Why NZ's mortgage strain is 'a bit like Covid' and what you can do
To   : All
From : News
Date : Thu May 02 2024 12:53 pm

Kiwis in loan trouble are being urged to talk to their creditors and for
banks to do more to help as more and more borrowers fall into strife.


The Reserve Bank released its six-monthly Financial Stability Report
yesterday. It included a stark warning that homeowners were increasingly
falling into mortgage strife - with the number affected set to increase by
the end of this year.


"Difficulty in keeping up with payments has likely been made worse by
cost-of-living pressures and other unforeseen events like job losses," the
central bank said, adding people aged between 30 and 50 were at the most risk.


Christine Liggins from Debtfix, a debt management advice service, told
Breakfast this morning: "People are doing it hard out there.


"We usually see people who are on low to middle incomes, and now it's going
middle to high incomes.


"It is affecting everyone. It's a little bit like Covid - it wasn't anyone's
fault that this is happening. It's a world crisis that we're having.


"All the prices have gone up, the cost of living's gone up, we've been
watching interest rates rise - and we knew that this was gonna hit our sector
very soon, and it's slowly been increasing since September."


Liggins said more people on high incomes were losing their jobs and incomes.

"Now they could be faced with losing their homes, and it doesn't bode well
for their mental health. They might not have been in this position before so
[they] don't know what to do.


"One of the things they should do is reach out to their creditors, to their
banks, because I would be expecting banks to help them through this," she
added. "It is a world crisis - again."


Liggins emphasised the pressures on mental health.


"We're seeing a huge increase in mental health issues based on finances.


"You had a good job, you've now lost it through no fault of your own... now
they've got no money, no means of getting a job of that level maybe, or not
for a few months, what are they gonna do?"


She also cited the widespread cuts in the public sector.


"We've already increased the cost of living so their budgets were already
very tight and, now, how're they gonna pay the mortgage?


"I would like some more assistance coming through the banks with with
mortgage hardship and helping them in that manner as well."


What can you do?
Liggins had one key tip for anyone feeling the mortgage strain.


"I urge everyone to talk to the banks because the banks can actually, they're
the one's holding the cards, aren't they?


"They're the ones who can offer the help. I'd like to see one bank actually
do interest freezes for a month or two, just to help the situation.

"I'd like the banks to extend hardship terms and work with our sector as well
to help manage the crisis that families are going through.


"Always talk to your creditors and your banks, they're the first ones who can
help you."

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