Advice For Homeowners Stressed About Juggling The Christmas Season And Their Mortgage Repayments.

With 6 weeks until Christmas many homeowners are starting to feel the pressure of meeting the demands of the holiday season and manging their increased mortgage repayments. Experienced mortgage adviser Neville Modlin from The Lending Team says “Kiwis are nervous, they’re already under financial pressure due to the rising cost of living combined with increased mortgage repayments, now add Christmas on top and it’s understandably overwhelming.”

Mortgage holders must realise “now’s the time to plan, not the week before Christmas” highlights Neville. He understands life gets busy but, getting a head of the Christmas rush and planning early gives you the freedom to enjoy the season without worrying about meeting your mortgage repayments come January.

Neville goes on to share his “Christmas Guide” for anxious homeowners:

• Don’t be tempted with the short term ‘fix’ of short term debt

“We’ll put it all on the credit card / Afterpay and figure it out later” This mindset can easily lead to spending outside your budget and greater financial strain. It’s not worth putting yourself in a vulnerable financial position.

• Decide on a clear budget and be honest

From gatherings with family and friends, gifts, summer trips, decorations etc. costs can add up fast during this period. Prioritise important traditions and sacrifice on the little things.

Tip: Setting aside your Christmas funds in a separate bank account can help you visualise the budget and keep track as you spend. Having your emergency fund separate means you don’t accidently spent important savings.

• Don’t miss your refix date and risk being put on floating – This is at almost 9%

Neville has seen clients reaching out as early as August to start preparing for refixes due in December / January. “They know they’ll be busy and want to start discussing their options now to avoid the Christmas rush – it’s great” he says.

He also mentioned over this period banks have reduced staff and clients needing to refinance or make changes eg. restructure or apply for interest only, need to lodge the requests early to avoid potential delays. Neville recommends homeowners reach out 6 weeks before their refix date as these changes don’t happen overnight.

• Approach sales with caution - You’re more likely to overspend than save.

Every year Kiwis are bombarded with sales during the holiday period often leading to impulsive purchases. It’s often these impulsive purchases that lead people to overspend especially, if they’re using Buy Now Pay Later payment options

• Seek support

It’s been a tough year for homeowners and with half of mortgages estimated to refix within the next year, there is a long road ahead. “Homeowners often have options they’re unaware of as they haven’t received specialised financial advice. Without experienced advice it can be overwhelming for homeowners to make a plan forward” says Neville.

It’s through early planning and specialised advice, The Lending Team hopes homeowners can avoid going into 2024 with unnecessary added financial pressure.

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