Fifteen thousand three hundred New Zealand consumers now sit in formal hardship arrangements, up 800 in a month and 7.8 percent year on year, according to the Centrix October 2026 Credit Indicator report.
Hardship rises while mortgage performance improves
The Centrix data released in early November shows 10.88 percent of credit-active consumers behind on payments. That figure sits above the 10.74 percent recorded in August yet remains 9.3 percent lower than a year earlier.
Mortgage arrears fell to 1.19 percent, the lowest level since December 2022. Roughly 19,600 home loans are past due.
Centrix chief operating officer Monika Lacey described the group in hardship as sticky.
It's that population, it's really sticky and it's hard.
Personal loan hardship volumes ran 32 percent higher than a year earlier and more than double the 2023 level. Thirty-eight percent of hardship cases involved mortgages and 34 percent involved credit cards.
Bank exposure contained for now
ANZ, ASB, BNZ and Westpac hold the bulk of residential mortgages. Their immediate bad-debt provisions should stay modest while mortgage arrears remain at multi-year lows.
Non-bank lenders face higher personal-loan arrears at 10.4 percent compared with 4.6 percent at banks. Any rise in the hardship cohort could still pressure bank capital and provisioning models in 2027.
RBNZ data for September showed system non-performing loans steady at 0.64 percent of total lending. Housing NPLs held at 0.53 percent.
| Lender type | Personal loan arrears (%) |
|---|---|
| Banks | 4.6% |
| Non-bank lenders | 10.4% |
Unemployment and liquidations add pressure
The unemployment rate reached 5.6 percent in the June 2026 quarter, up 0.4 percentage points year on year. Stats NZ recorded 171,000 people out of work.
Company liquidations totalled 3,173 in the 12 months to September, up 18 percent on the prior year and the highest since 2010.
- Construction firms accounted for 790 liquidations, up 9 percent.
- Hospitality saw 431, up 41 percent.
- Retail trade recorded 253, up 53 percent.
Highest arrears rates appeared in Wairoa, Kawerau and Opotiki. Lowest rates were in Tasman, Nelson and Wellington.
OCR risk and household costs
Earlier OCR cuts helped push average mortgage rates down from peaks near 6 percent. Any re-acceleration in the OCR would reverse that relief.
A 25 basis point rise in the OCR typically adds around $35 to $45 per fortnight to payments on a $550,000 mortgage at current rates, depending on the fixed or floating structure. Borrowers rolling off low fixed rates face larger jumps.
Retail energy arrears rose 4.9 percent in September and stood 8 percent higher than a year earlier.
Forward risks into 2027
Centrix noted seasonal factors ahead of Christmas, with potential arrears spikes into February. Banks forecast further NPL declines, yet impairments have not improved materially.
Rising liquidations in construction, hospitality and retail point to employment shocks that could feed higher arrears if unemployment climbs further. The concentrated hardship tail remains the clearest forward signal for bank credit quality.
