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COMMENT: Extend mortgage holidays

The Covid-19 prompted mortgage “holiday” scheme is set to end in September but Century 21 New Zealand owner Derryn Mayne is calling for it to be extended.

Monday, July 27th 2020, 12:14PM

Century 21's Derryn Mayne

Back in March, the Government, along with Reserve Bank and retail banks, announced a six-month mortgage holiday (aka mortgage repayment deferral) scheme for mortgage holders whose incomes were affected by economic disruption from Covid-19.

That scheme is due to wind up in September. 

And that means New Zealand real estate will be left facing a triple whammy at that time - which will be detrimental to house prices and industry activity unless the Government steps in.

With the general election and the end of the extended wage subsidy scheme both firmly locked in for September, extending the mortgage holiday scheme is a no-brainer.

As of 30 June, nearly 60,000 Kiwis had deferred their payments on the likes of mortgages.

A further 79,000 had reduced their payments servicing home loans, personal lending or debt.

Finance Minister Grant Robertson has said extending the six-month home loan deferral scheme is now being actively considered by the Reserve Bank.

Earlier this month, Australian banks agreed to extend their six-month mortgage holiday scheme by another four months.

Having supported over 1.7 million jobs, the hugely successful wage subsidy scheme comes to an end on 1 September.

We have a general election on 19 September which always sees real estate activity slow, and then on 24 September the mortgage holiday scheme is due to expire.

This could be a spring of discontent for thousands of Kiwis, but it doesn’t have to be.

The underlying strength of New Zealand real estate continues to prove itself, with any doom and gloom forecast back in March and April yet to be proven right.

Industry statistics show median house prices across New Zealand are well up on last year and most regions are still experiencing price lifts month to month.

REINZ also reported the highest number of new listings and properties sold for the month of June in four years.

Basically, real estate is defying any negativity and that’s great for overall business and consumer confidence.

With the triple whammy factor mentioned above, a perfect storm is now on the horizon - but we still have time to avoid it.

The Government, Reserve Bank and retail banks acted decisively back in March. We need that same bold leadership again, and soon.

Tags: banks Century 21 coronavirus Covid-19 housing market investment landlords Lending mortgage holiday mortgages property investment real estate REINZ

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 ▼2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.15 3.29 ▼3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 3.09 3.19 3.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.59 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.99
The Co-operative Bank - Standard 4.40 3.05 3.19 3.49
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.12 3.19 3.17

Last updated: 4 August 2020 11:33am

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