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Financial pressure hits the borrowing public

Inflation is continuing to hit the public and the business sector alike, according to the credit company Centrix.

Tuesday, August 2nd 2022, 5:47AM

by Eric Frykberg

One in 10 credit cards are in arrears, which is a slight improvement from May but is still 14% worse than it was a year ago.

Furthermore, 4.1% of credit active consumers are currently more than 30 days overdue, and 2.3% are over 90 days past due, indicating affordability stress for some households.

Arrears on vehicle loans have risen, which is seen as significant, since people usually make a point of keeping up car payments as a priority.

And as people with loans are getting into greater trouble, others are avoiding loans in the first place.

New lending for non-mortgages is down 18% on last year, while mortgage lending is down 37% year-on-year.

The retail sector is selling less and incurring more defaults on those credit loans that actually go ahead.

By contrast, the tourism sector is doing better.

New credit card lending has recovered from its trough of late last year but is still 23% down on a year ago.

Buy Now Pay Later (BNPL) new customer inquiries are down 30%.

The new figures have a positive side to them. Despite overall mortgage debt increasing, the number of mortgages in arrears has fallen slightly, and there is little sign of mortgage stress stress emerging, despite recent interest rate hikes.

In addition, utility bills are being paid off faster, and Centrix infers people are prioritising heating payments in freezing weather over other spending.

The Centrix research paints a picture of customers under 30, who number 620,000. It says only 12% have mortgage commitments, but over half use a BNPL product, with just a quarter using credit cards.

The average credit score for the under 30s is 633, which is 120 points below the national average.

Tags: financial resilience

« Second tranche of CCCFA changes announcedSlightly higher unemployment figures no boon for borrowers – experts »

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Lender Flt 1yr 2yr 3yr
AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 4.89 - -
Co-operative Bank - Owner Occ 6.25 4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 ▼5.15 ▼5.14
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 ▼6.59
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 ▼5.69
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 5.65 6.09 6.39
TSB Special 6.25 4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 5.55 6.05 6.29
Westpac - Offset 6.39 - - -
Westpac Special - 4.95 5.45 5.69
Median 6.34 5.33 5.79 5.83

Last updated: 15 August 2022 8:19am

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