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CCCFA cuts mortgage acceptances by 23%

New information suggests the Credit Contracts and Consumer Finance Act (CCCFA) is already biting sharply into people's ability to get a mortgage.

Friday, January 14th 2022, 2:15PM 2 Comments

by Eric Frykberg

It suggests a 23% drop in the number of people getting a mortgage after the Act came into force. Consumer finance applications such as credit cards were also hit.

The figures come from the credit reporting company Centrix.

They show, in summary, one in five mortgage loan approvals have been hit by the new CCCFA regulations.

In other words, many consumers who were previously approved are no longer eligible under the CCCFA changes.

Centrix stresses it is early days, and further information will come in as the subject is researched deeper.

But it says in the pre CCCFA-era, monthly mortgage commitments were on average, $8.3 billion per month.

Post-CCCFA, the number was down to $6.4 billion, which is a 23% drop.

Centrix stresses that these figures are indicative at this stage and might change slightly in the coming weeks as more data is received.

But it says a clear picture of thwarted customers is starting to reveal itself.

The CCCFA has been widely criticised as a broad brush approach to specific and often quite rare problems, and the managing director of Centrix, Keith McLaughlin agrees.

“Back in January 2020, arrears on mortgages were 1/5% of the portfolio. They are now down to about 0.9%,” he said.

“I think responsible lending and comprehensive credit reporting have played a major role in dropping the arrears across major mortgage portfolios, to the extent that I don't think it is a major issue.

“The introduction of this legislation is affecting more people than just the vulnerable.”

As a credit reporting agency, Centrix might normally be expected to support legislation that led to fewer bad debts.

McLaughlin said even the 0.9% of arrears needed to be dealt with, but a sledgehammer approach that covered the entire market was not the right solution.

« Non-bank deposit takers fail to elude latest Govt crackdownMinister orders enquiry into CCCFA »

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Comments from our readers

On 14 January 2022 at 2:44 pm Tang Shing-bor said:
What a joke. I work off the principal the government is fundamentally incompetent and screw up everything they touch. I'm not usually disappointed. Let's see how this plays out.
On 14 January 2022 at 8:48 pm w k said:
will any heads roll for the stuffed up?

advisers got no mercy, named and punished including being struck off.

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Lender Flt 1yr 2yr 3yr
AIA 5.95 4.85 5.35 5.65
ANZ 5.94 ▲5.95 ▲6.40 ▲6.59
ANZ Blueprint to Build - - - -
ANZ Special - ▲5.35 ▲5.80 ▲5.99
ASB Bank 5.85 ▲5.35 ▲5.80 ▲5.99
Avanti Finance 5.95 - - -
Basecorp Finance 6.95 - - -
Bluestone 5.89 7.49 8.09 8.19
BNZ - Classic - ▲5.35 ▲5.69 ▲5.99
BNZ - Mortgage One 5.94 - - -
BNZ - Rapid Repay 5.94 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.94 ▲5.95 ▲6.29 ▲6.59
BNZ - TotalMoney 5.94 - - -
CFML Loans 6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Co-operative Bank - First Home Special - 4.75 - -
Co-operative Bank - Owner Occ 5.85 4.85 5.35 5.65
Co-operative Bank - Standard 5.85 5.35 5.85 6.15
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.95 5.45 -
Heartland Bank - Online 4.10 ▲4.40 ▲4.90 ▲5.10
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.10 5.00 5.75 -
HSBC Premier 5.89 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.25 4.39 5.09 5.45
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 5.50 ▲6.19 ▲6.69 ▲6.79
Kiwibank - Offset 5.50 - - -
Kiwibank Special 5.00 ▲5.19 ▲5.69 ▲5.89
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society 6.45 ▲5.55 ▲6.15 -
Pepper Money 4.49 - - -
Resimac 6.19 5.60 6.16 6.29
SBS Bank 5.79 5.05 5.69 5.89
SBS Bank Special - 4.55 5.19 5.39
Select Home Loans 4.09 4.29 4.86 5.09
TSB Bank - ▲5.65 5.79 ▲6.45
TSB Special ▲4.89 ▲4.85 4.99 ▲5.65
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 5.74 4.95 5.75 -
Westpac 5.94 ▲5.95 ▲6.29 ▲6.59
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.94 - - -
Westpac Special - ▲5.35 ▲5.69 ▲5.99
Median 5.85 5.05 5.69 5.99

Last updated: 27 June 2022 8:43am

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