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How To Navigate Mortgage Stress And Debt With A Clear Plan
•Zebunisso Alimova
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Money pressure builds quietly—then feels impossible. We open up about what we’re seeing across New Zealand households right now: families juggling higher refix rates, patchy incomes after layoffs, and the creeping stress of arrears on essentials like rates and insurance. Rather than waiting for a final notice, we walk through practical moves that lenders actually respect and respond to.
We start with the first lifeline most people overlook: the bank’s care team. From temporary interest‑only terms to short mortgage holidays and structured arrears plans, there are real tools on the table when you engage early and show a plan. We talk frankly about pride, avoidance, and unopened mail, and why one honest call can buy the time you need to reset your cash flow. Alongside that, we map the income side—extra shifts, casual work outside your field, and small asset sales—and explain how benefits help but rarely bridge a mortgage gap on their own.
Debt priorities can be counterintuitive. While high‑interest balances bite hard, lenders also assess “character” in the five C’s of lending. Keeping a tiny drip on 0% Work and Income or IRD debts for years can signal poor intent and weaken future approvals. We explain a smarter twin‑track: clear government debts quickly to strengthen your profile while you cut the worst revolving rates. If multiple providers and due dates are tripping you up, consolidation can simplify repayments into one manageable line, reduce fees, and lower the risk of missed payments—provided you pair it with a firm spending reset.
Second‑tier lenders aren’t a magic escape; they have policies and risk appetites too. They read statements, they spot patterns, and they weigh behaviour. That’s why early engagement matters more than bravado. If you’re feeling stuck, reach out. We’ll help you talk to the right teams, organise a repayment plan, and protect the bills that really matter. Subscribe for more clear, practical finance guidance, share this with someone who needs a nudge, and leave a review to help others find it.
This episode is about the struggles that we see out there. So listen up if you are struggling financially at the moment or if you know anyone that's struggling and needs help and what they can be doing to help themselves and the role we play in this industry. Hey Kunch. Good morning. How are you? Good morning. A bit of a dull one for us.
SPEAKER_00
Yes, it is, but an important one as well, given that we have seen a few cases come through us of late in terms of people
just finding it a little bit hard out there with you know the economic struggles and our environment at the moment. Although interest rates have come down, we still have many, many families out there struggling to meet those home loan payments and even, you know, put food on the table. So we thought we'll cover this topic off.
SPEAKER_01
Yeah, because let's face it, the last two years haven't been easy, right? The interest rates were super high and there has been a lot of laid-offs. So people have been losing jobs. Yep. And losing jobs coupled with the high interest is never a good recipe, right? It's a recipe for disaster. Yeah. And we are seeing the follow-on effect from it now because although the bank can help you for as long as they can, it's coming to a point for a lot of our clients that the banks
are saying, look, we can't help you any further. But it also, what can you do in that situation? And what we found, the people that are coming to us, they have put their head in the sand a little bit.
SPEAKER_00
Yeah, there has been some stubbornness and some ignorance in terms of I guess it's also pride as well, in terms of what's actually happening. You know, you yeah, like you said, the banks actually have a plan. So they they're they have care teams in each of the banks. So if you are struggling and things, don't be too proud to actually contact the bank and and the care team will actually work with you. They'll give you some solutions in terms of how to meet your mortgage repayments, or they may put you on interest only, they may give you mortgage
holidays, like they have options, and it will take them or they give you about six to twelve months, I think, before some real action does come to fruition.
SPEAKER_01
Yeah. And I guess the thing is that come into play as well is that people need to take responsibility for their actions, you know. And I have a lot of clients that have taken up secondary jobs, you know, and even not in the industry. Like, look, we have some professionals that might have worked in the government, you know, but now they are resorted to driving a bus. Yeah. Because that's the only way to put food on the table. So, and the benefit often doesn't cover the work benefit, no work and income benefit, doesn't cover the repayments for your mortgages. But again, you know, go out there, see what you can do, don't just hide and go, everything's gonna be all right eventually.
SPEAKER_00
Yeah, or I don't, I don't know what I'm doing, or I I I didn't get that letter in the mail, you know. So we've we've had a lot of our clients going, oh, they didn't contact me. The bank didn't contact me. I didn't get the
letter in the mail. How however, the bank actually has to contact you, they're legally has to, you know, send you an email, send you a letter in the post. They have to try calling you before they take full-on action and let you know and sell your house, basically.
SPEAKER_01
Yeah, and the other thing we've seen as well is people falling behind on their rates, um, rates and insurances. So what can you do there? You know, like, okay, while you when you do buy a house
for the first time, set up those automatic payments. You know, make sure you pay more than what you're supposed to. So if you divide your rates by 52 weeks and it comes to $50 a week, you know, pay $60 a week because you're always going to have that buffer to allow for the rates as they increase, you're gonna have that small buffer and keep adjusting those automatic repayments. The other thing we've seen as well is when people don't realize the seriousness of various debt. So, for instance, we've got this client and they have
debt across, let's say, Gem Visa at 26% interest, and then they also have work and income debt, historical debt that work and income would have paid them a bit more on benefit, and then they realized they didn't qualify for this benefit, so they want to have this benefit back. However, the interesting thing that happens here is the work and income benefit comes at 0% interest, right? So automatically people think, why should I pay back the debt that on 0% interest first? I will concentrate all my might and power on the ones that are higher interest. You would think, yeah, that's logical. That's what I should be doing. However, when it comes to a new credit event, so for instance, people want to now come and buy a house and they've got really good incomes,
but they're paying this work and income debt at 0%, $25 a week. The way the bank will look at it as if not in a good way, let's put it that way. Yeah, they will think that you are mucking around and taking a piss. Yeah. Excuse my language. But it is true though. Yeah, like they want to see that you're serious about your debt and you want to pay it back as soon as possible. Yeah.
SPEAKER_00
So it comes under that, you know, under the lending category, under the five C's, right? It comes under character.
SPEAKER_01
Yeah.
SPEAKER_00
So when your application is looked at, your character is looked at as well as capital, collateral, and so on. So if you're taking God knows how long to pay $25 a week or something on a debt that could be wiped out because your income is really good, shows your character.
SPEAKER_01
And look, a lot of the time, as I just mentioned, you know, people don't even understand that. They don't even see that being a problem. They don't understand the seriousness of the situation, that how much it affects their character. Because here they are concentrating on higher interest debt, because that's what they've been. Which makes sense as well, right? Yeah, exactly. So this is our you know, suggestion to those out there that if you do have any IRD debt or working income debt, try to wipe that out
just as fast as your higher interest debt. The other thing you can also do is debt consolidate. So we've been consolidating a lot of debt for the state. Because we have actually to make it easier for them because even though it might be very similar interest rate, but by putting all of the debt into one loan makes things easier.
SPEAKER_00
Yeah. It helps with the repayments and you managing your finances a lot better when you've got one place to pay rather than five different providers that you're paying for. Yeah. Yeah. Yeah, exactly. And we have yeah, seen that a wee bit as well.
SPEAKER_01
Exactly. So just to recap, what we're seeing is a lot of struggle out there. People leaving things to the last minute. So please don't. Please go and see us earlier
because even though we are known as miracle workers, there are certain miracles we just cannot perform. You know, you can't revive people from death sometimes. And unfortunately, when it comes to a lending situation where it's just too bad, we just can't help, you know. And also, as we've discussed off screen conch, as the second-tier lenders, you know, sometimes people go, Oh, I'm happy to go as a second-tier lender. But even second-tier lenders, there are cases where they can't help.
SPEAKER_00
Yeah, they they're they're cautious that as well, because obviously they assess the five C's of lending as well. So character also falls into play with them. And also they're bound by policies and regulation as well, as much as they are the banks are. So although second-tier lenders are a second option, they're they're they'll be looking at the same thing.
SPEAKER_01
Yeah. What we call the have is a lending appetite. And sometimes it just comes to a point where they don't have the appetite for that type of risk. So here's a wrap. And let us know if you are struggling or if
you know someone that's struggling, you know, send them our way because what we can start doing now is putting a plan in place. Because at least if you have a plan, you know where you're going. If you don't have a plan at all and just have your head in the sand, you're just gonna get worse and worse. Yeah. So come and see us, we'll be able to sort it out. And look, it doesn't even cost you anything. So we're free. We're free. Awesome, guys. Thank you so much and have a lovely day ahead. Thank you.
