PHOTO: RAWPIXEL
According to STUFF five hundred more households fell into mortgage arrears in February, data released by credit reporting company Centrix shows.
At the end of February, there were 18,900 mortgages on which borrowers had missed payments, up from 18,400 the previous month.
“Our latest data shows mortgage arrears climbing for the seventh consecutive month, which could point to many being unable to service these higher mortgage rates,” said Centrix chief executive Keith McLaughlin.
Economists expect the Reserve Bank Te Pūtea Matua to lift the official cash rate (OCR) on Wednesday in its continuing battle to bring down inflation.
“We are forecasting the Reserve Bank will lift the OCR by 25 basis points – though a 50 basis point hike remains in the realm of possibility – which will take the OCR to 5%, the highest it’s been since 2008 in the lead-up to the Global Financial Crisis,” said ASB chief economist Nick Tuffley.
Jarrod Kerr, chief economist at Kiwibank, said: “The Reserve Bank’s decision this week should be relatively straight forward. All surveyed economists expect a rate hike, most think 25 basis points.”
McLaughlin said the Reserve Bank’s battle against inflation had resulted in rising interest rates for most households.
“Coupled with fixed-rate home loans rolling off and having to commit to higher repayments, the cost-of-living squeeze continues to impact many households nationwide,” he said.
There are three credit reporting companies in New Zealand; Centrix, Illion and Equifax.
They gather data on people and their loans, and compile credit reports on them. It is data from the reports that Centrix compiles that allows it to calculate overall arrears rates.
Just over one in every 100 home loans (1.29%) was in arrears at the end of February, Centrix said.
Despite another rise in the number of home loans in arrears, fewer people with other forms of debt, like personal loans, were behind in their repayments at the end of February compared to the end of January.
The number of people behind on repayments ended the month at 416,000, Centrix said.
Nearly nine in every 100 personal loans was in arrears.
And just over nine in every 100 BNPL loans was past due, which was the highest level of any kind of lending tracked by Centrix.
Just under five in every 100 car loans was in arrears.
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