New Zealand Banking Association says a large proportion of mortgage holders are 'reaping the benefits' of paying down their loan faster

With mortgage rates now well on the way down and increasing numbers of people getting the benefit of lower rates, we can possibly officially label the Kiwi home owners a resilient bunch.

Banking industry body the New Zealand Banking Association has released its latest six-monthly retail banking insights covering the period to December 31, 2024.

And the figures show that despite the large increases in interest rates mortgage holders faced between 2021 and 2024, nearly 40% of them, as of December 31, were still ahead on their repayments. 

That percentage figure is little changed from when the NZBA released its previous insights, covering the first half of 2024, although if we go back a little way to the figures NZBA gave for the January-June 2022 period some 45.8% of mortgage holders were then ahead of minimum repayments.

Commenting on the figures for the six months to the end of December 2024 New Zealand Banking Association chief executive Roger Beaumont said it was "great to see" a large proportion of those with home loans ahead on their repayments "and reaping the benefits of paying down their loan faster, especially in the current economic climate".

But some have struggled.

Separate data from the Reserve Bank showed that $2.163 billion worth of mortgages (about 0.6% of the total) were non-performing at the end of 2024. As of February 2025, the latest available figure, that total had increased to $2.351 billion.

NZBA said that as of December 31, 2024, 1.5% of loans were behind on their loan repayments - that's up from 1.4% in the previous six-month period ended June 30, 2024.

Also on the rise was the number of loans switching to interest only repayments. In the latest six month period, 17,445 home loans switched from principal and interest to interest only repayments. That was up from 13,095 in the six months to June 2024.

Of all banking customers (not just mortgage holders), 8,863 applied for hardship status in the six months to December, a decrease of 4.4% compared to the last reporting period.

During the latest six-month period, 7,389 customers were granted the hardship status, reflecting an increase of 23.8% from the previous reporting period.

Credit card data in the latest six month period showed fewer people were using credit cards - but those that were using them were spending more. 

NZBA said the number of unique customers with a credit card decreased to 2.17 million from 2.23 million. The number of credit cards also decreased by 4.2% compared with in the six months to June.

The average monthly spend per credit card account was $2,131, an increase from $2,076 compared to the last reporting period.

While 66.5% of cards were paid off in full without incurring any interest cost, this was down on the 67.2% figure for the six months to the end of June.

Back on the home loans - there were 1.4 million home loans across 1.1 million customers at the end of the period. The average value, per customer, of a home loan was $323,082, an increase of 1.6% from the last reporting period.

There were 56,938 new home loans during the period, an increase of 21% from 47,061 in the last period.

"The increase in home lending is quite significant," Beaumont said, pointing to the fact that the Official Cash Rate had been reduced from 5.5% to 4.25% in the second half of 2024. It has been subsequently reduced further to 3.5%.

Beaumont said the rise in home lending "also reflects a growing return of confidence to the property sector".