PHOTO: Jacinda Ardern. GETTY

More than 18,000 mortgages currently have overdue payments, according to the latest data from Centrix. In August, there were 18,600 mortgages with payments behind schedule, marking a 28% increase compared to the same period the previous year.

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However, for the third consecutive month, mortgage delinquencies have shown a slight decline, bringing the total percentage of loans in arrears down to 1.25% in August.

Opotiki had the highest proportion of loans in arrears at 2.78%, followed by the Far North and Hauraki districts.

Jarrod Kerr, the chief economist at Kiwibank, attributed this situation to the Reserve Bank’s efforts to combat inflation by imposing strict interest rates. He anticipates a rise in financial distress as the impact of these measures unfolds. Kerr also expressed concern about the potential increase in unemployment, which is expected to climb from a record low of 3.2% at the beginning of the previous year to approximately 5.5% in the coming year.

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Mortgage broker Glen McLeod reported an increasing number of clients seeking advice on the affordability of their home loans. Many are requesting to switch to interest-only loans, necessitating new applications to ensure they can still manage their existing lending. There is also a significant demand for switching to lower-interest-rate providers.

Regarding consumer lending, arrears decreased slightly from 11.7% in July to 11.62% in August, with a year-on-year increase of 7.8%.