Bank customers continue to manage home loans and credit cards well in challenging times

At a time of rising costs, consumers are continuing to manage their credit cards and home loans well according to data insights released by the New Zealand Bankers’ Association today.

“In these challenging times it’s great to see people using banking products and services to help stay ahead financially,” says New Zealand Bankers’ Association chief executive Roger Beaumont.

“Nearly 46 per cent of people with a home loan are ahead on their repayments, which is up 1.8 per cent compared to the previous six months. People behind on their loan repayments dropped from two per cent of all home loans to 1.05 per cent, which is a very positive trend in the current environment.

“This means many people with home loans continue to be well placed as interest rates rise from historic lows. As interest rates declined over recent years, these borrowers likely retained their repayments at the same level, or increased them, to help repay their loans faster, which shows a good level of financial capability.”

The information relates to the six months from January to June 2022 and was collected and aggregated from NZBA’s 10 main retail member banks.

In this period customers took out 44,681 new home loans, of which 58.2 per cent were issued to first home buyers. The average value of all home loans was $304,655, and the average of value of home loans for first home buyers was $505,741.

“People are also managing their credit cards well, with 66.6 per cent of card balances paid off in full without incurring any interest costs. We’re delighted to see people showing they know how these products work and getting the most out of them.

“While consumers are being smart with home loans and credit cards, it’s also fair to say that banks are continuing to lend responsibly. That’s particularly important as we face some economic headwinds.

“Anyone experiencing financial difficulty should contact their bank as soon as possible. The sooner you talk to your bank, the more likely they’ll be able to help.

“Another point to note is the ongoing move to digital banking. During the Covid lockdowns we saw a dramatic shift in customers using online banking and mobile banking apps to meet their everyday banking needs. Around three quarters of all bank customers are registered for online or mobile banking.

“There’s still a need for physical banking services for those who can’t or prefer not to bank online. That’s particularly the case in small communities that don’t have bank branches. Our regional banking hub trial, and the recently announced expansion, is testing practical solutions for those communities,” says Beaumont.

The latest retail banking insights are available here: