mortgage holidays

PHOTO: RICKY WILSON/STUFF A mortgage holiday isn’t really a break if interest is still being charged, Geoff Simmons says.

New Zealand banks should use their profits to write-off the interest accrued while borrowers are on mortgage holidays, one economist says.

Geoff Simmons, who is also leader of The Opportunities Party, welcomed the Reserve Bank call for banks not to pay dividends to shareholders until the economy recovered from the hit of Covid-19.

But he said they needed to go further and use any profit they made this year to pay the interest that homeowners were charged while on repayment holidays.

RELATED: 30,000 mortgage ‘holiday’ requests

Banks have agreed with the Government to offer borrowers six-month breaks from repayments if they suffer an income blow from Covid-19. But interest still adds up over this period so the loan becomes more expensive overall.


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