The latest Centrix Credit Indicator Report shows New Zealand’s credit market has opened the year with strong lending momentum but also a predictable seasonal lift in arrears as households absorb holiday spending and summer cash-flow pressures.
In our December market update, consumer arrears had dropped to a two-year low, with 11.83% of the credit-active population behind on payments and 459,000 people in arrears.
This month, consumer arrears have increased to 12.07%, with the number of consumers behind on payments rising to 471,000. While this is up from November’s level, Centrix notes it reflects typical seasonal patterns and remains 0.8% lower year-on-year.
Mortgage Arrears Edge Higher But Still Well Below Last Year
Mortgage arrears also rose slightly, moving from 1.35% in the December report to 1.37% in the latest report, aligning with the seasonal rise in consumer arrears overall.
The number of mortgage accounts past due increased from 20,900 to 21,800. Despite the lift, Centrix highlights mortgage arrears remain 8% lower year-on-year, suggesting that underlying mortgage stress continues to ease compared to 2024 levels.
Credit Cards: Arrears Climb to the Highest Level Since May
Credit card arrears rose again this month, increasing from 3.9% in the December report to 4.0%, the highest level since May.
Even with this increase, Centrix notes credit card arrears are still 6% lower than a year ago, indicating the longer-term trend remains broadly positive.
This is particularly interesting given demand for credit cards remains soft. Credit card enquiries are down 19.9% year-on-year, showing consumers may be cautious about taking on revolving credit, even while balances and repayment pressure tick up.
Personal Loans:
Arrears Jump Sharply as Holiday Borrowing Peaks
Personal loans are one of the clearest pressure points in this month’s update.
Centrix reports personal loan arrears rose to 9.8%, up 6% year-on-year.
At the same time, demand for personal loans remains strong. Personal loan enquiries are up 15.5% year-on-year, reflecting elevated borrowing through the holiday period.
Together, these figures suggest that while borrowers are confident enough to keep borrowing, repayment pressure is emerging quickly, especially in unsecured lending.
BNPL:
Arrears Lift Again, But Demand Falls
BNPL is showing a slightly different pattern: demand is weakening, but arrears are still rising. Centrix reports BNPL arrears increased to 7.9% in the latest report.
Centrix also notes BNPL arrears remain 4% lower year-on-year, despite the month-to-month rise.
Interestingly, BNPL demand is down 6.1% year-on-year, suggesting fewer consumers are applying for BNPL, but those already using it are more likely to fall behind.
The Bigger Picture
Compared with the position outlined in our December update, the trend has shifted in line with seasonal pressures:
- Total consumer arrears have risen from 459,000 to 471,000
- The arrears rate has increased from 11.83% to 12.07%
- Mortgage arrears have edged up from 1.35% to 1.37%, though remain well below last year’s levels
- Credit card arrears have lifted slightly from 3.9% to 4.0%
- Personal loan arrears have climbed to 9.8%, while BNPL arrears have increased to 7.9%
While the seasonal summer bump is evident across most credit products, the longer-term picture remains steadier than a year ago. Mortgage stress continues to sit below 2024 levels, and overall arrears remain broadly aligned with 2023 trends.
With credit demand still strong, particularly for mortgages and personal loans, the data suggests households remain active in the lending market, even as repayment pressure tightens temporarily after the holiday period.
As we move further into 2026, the key question will be whether arrears settle back again once seasonal pressures ease, or whether unsecured credit segments continue to feel the strain.
