REINZ Welcomes Announcement Of Extended Mortgage ‘Holiday’

The Real Estate Institute of New Zealand (REINZ) has today welcomed the announcement from The Reserve Bank of New Zealand and the New Zealand Bankers’ Association that the home loan deferral scheme has been extended for an additional 6 months, until 31 March 2021.

On 24 March 2020, The Reserve Bank and retail banks announced a six-month principal and interest payment ‘holiday’, which was initially due to end on 27 September 2020.

Bindi Norwell, Chief Executive at REINZ says: “We welcome the announcement today from the RBNZ and NZBA as a way of supporting families who are struggling to pay their mortgage as a result of financial difficulties arising from COVID-19.

“The economic effects of the global pandemic still being felt widely across the country, including numerous examples of companies announcing restructures and jobs being disestablished. These announcements have a significant impact on the housing market in terms of people’s confidence and their ability to pay their mortgage.

“It is great to see New Zealanders being supported in order to help them stay in their homes as they work through this difficult time,” she continues.

“However, it’s important that by extending the mortgage ‘holiday’ for individuals, that it doesn’t place people into even further debt down the track – as the interest accrued doing the mortgage ‘holiday’ still needs to be paid back,” points out Norwell.

“It’s imperative to get a balanced approach between sensible lending, how highly leveraged an individual is and at the same time maintaining a stable property market,” concludes Norwell.

According to the New Zealand Bankers’ Association, since 26 March, banks have deferred all repayments on consumer loans totalling around $21 billion for over 61,000 customers. That represents 7% of total consumer lending. Nearly a quarter of those customers have restarted their loan repayments.

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