As we head into December, the latest Centrix Credit Indicator (November 2025) shows continued improvement in household credit conditions, building on the stabilisation we saw last month.
In November, 11.83% of the credit-active population were behind on at least one repayment, the lowest arrears rate in more than two years. The number of people behind on payments has fallen again, down to 459,000, compared with 468,000 reported in last month’s Loansmart update. That’s a further 9,000 fewer New Zealanders in arrears in just one month, and a 2.5% improvement year-on-year.
The trend confirms what we began to see in September: arrears are easing steadily rather than bouncing around, suggesting households are gradually regaining control of their finances.
Mortgage Arrears Reach a Two-Year Low
Mortgage borrowers continue to lead the recovery. Mortgage arrears fell to 1.35% in October, down from 1.36% last month and 1.37% in September. This marks the lowest level since November 2023, with 20,900 mortgage accounts currently past due, unchanged in volume but improved proportionally as lending grows.
Refinancing remains a major driver. More than 30% of new mortgage lending now comes from refinancing, up from 22% three years ago, as borrowers continue to chase lower interest rates in a more competitive lending environment.
Credit Cards: Still Stable, Slight Monthly Uptick
Credit card arrears edged slightly higher this month to 3.9%, following the decade-low 3.7% reported in September. Despite the small increase, credit card arrears remain 11% lower than a year ago, signalling ongoing stability in revolving credit.
Interestingly, demand for credit cards has softened sharply. Credit card enquiries are down 22.2% year-on-year, suggesting many consumers are either tightening spending or favouring other forms of lending heading into the holiday period.
Personal Loans: Demand Up, Arrears Holding Steady
Personal loans remain a key area of activity. Demand for personal loans is up 13.3% year-on-year, driven by seasonal spending and rising consumer confidence ahead of Black Friday and Christmas.
While the November report notes that some credit types are “holding steady,” personal-loan arrears are no longer worsening and remain around the 9% level seen in September, when arrears last measured 9.0%. That lack of deterioration is notable given the strong growth in new lending and suggests affordability pressures may be easing slightly.
BNPL: Demand Rises as Arrears Remain a Watch Point
BNPL continues to grow in popularity, with demand up 5.6% year-on-year heading into the festive shopping season.
While the November report does not flag a material change in BNPL arrears, this follows September’s increase to 7.4%, which was marginally higher than a year earlier. With demand rising and arrears previously elevated, BNPL remains an area to watch closely as consumers lean into short-term credit over Christmas.
The Bigger Picture
Compared with last month’s update:
- Total consumer arrears have fallen from 468,000 to 459,000
- The arrears rate has dropped from 12.09% to 11.83%
- Mortgage arrears have improved again, hitting a two-year low
- Credit card arrears remain low despite a small monthly increase
- Personal loan and BNPL demand is rising, without a corresponding spike in arrears
With interest rates easing and refinancing activity staying strong, the data suggests that household balance sheets are slowly stabilising. While pressures remain, particularly in unsecured credit, the consistent improvement over the past three months provides a more optimistic backdrop as New Zealand heads into 2026.
