News

Payment holidays won't affect credit scores

Banks have quashed speculation that payment holidays will affect customers' credit scores and their ability to borrow in the future.

Friday, April 03rd 2020

Banks rolled out six-month payment holidays for borrowers affected covid-19 this week. Owner-occupiers, investors, and business owners can take a payment holiday on principal and interest payments, but their loans will accrue interest over the period.

The payment deferrals are part of a huge intervention by the Reserve Bank to prevent a financial catastrophe, as covid-19 takes a stranglehold on the New Zealand economy. 

However, some advisers have expressed fears those taking payment holidays would be referred to credit agencies, or face difficulties obtaining financing in the future. 

Banks have moved to allay those concerns. 

Westpac says customers who are not in arrears will be marked with a 'payment not required' flag, which will be reported to credit agencies, but will not impact borrowers' ability to get new credit in the future. 

Only borrowers who are in arrears before their payment holiday will be marked with a 'hardship' flag, a Westpac spokesman said. 

BNZ also confirmed its payment holidays won't affect credit scores: "Other banks will build their credit models differently so I cant speak on their behalf, but if a customer does take a deferral, it doesn’t impact their internal credit rating for us."

ANZ echoed the same line: "A home loan repayment deferral alone won’t impact a customer’s credit rating. However, if they’ve already missed repayments for any reason, even if we later give them a repayment deferral, this may have impacted their credit rating."

A Kiwibank spokeswoman said payment holidays would not affect credit scores "if they apply due to covid-19". 

 

Comments

No comments yet

Most Read

SBS FirstHome Combo 4.29
Unity First Home Buyer special 4.29
Co-operative Bank - First Home Special 4.85
China Construction Bank 4.85
ICBC 4.85
TSB Special 4.89
Kiwibank Special 4.89
ASB Bank 4.89
Westpac Special 4.89
BNZ - Std 4.89
AIA - Go Home Loans 4.89
Nelson Building Society 4.93
ICBC 4.95
SBS Bank Special 4.95
China Construction Bank 4.95
Wairarapa Building Society 4.95
TSB Special 4.95
ANZ Special 4.95
ASB Bank 4.95
Kainga Ora 4.95
Westpac Special 4.95
AIA - Go Home Loans 4.95
SBS Bank Special 5.39
Westpac Special 5.39
ICBC 5.39
Co-operative Bank - Owner Occ 5.59
BNZ - Std 5.59
BNZ - Classic 5.59
AIA - Go Home Loans 5.59
ASB Bank 5.59
Kainga Ora 5.69
Kiwibank Special 5.79
ANZ 5.79
SBS Construction lending for FHB 3.94
AIA - Back My Build 4.44
CFML 321 Loans 4.99
Co-operative Bank - Owner Occ 5.95
Co-operative Bank - Standard 5.95
Heartland Bank - Online 5.99
Pepper Money Prime 6.29
Kiwibank - Offset 6.35
Kiwibank 6.35
TSB Special 6.39
ASB Bank 6.44

More Stories

Four decades of 6-7% yearly house price growth ending

Friday, March 21st 2025

Four decades of 6-7% yearly house price growth ending

New Zealander’s reliance on property capital gains in the mid-single digits is at an end.

[TMM Podcast] Yelsa serves up “marine reserve” of property buyers

Friday, January 31st 2025

[TMM Podcast] Yelsa serves up “marine reserve” of property buyers

It’s been years in the making and former real estate agent Mike Harvey is now coming to market with his platform matching buyers and sellers, an offering he says will be a gamechanger for the industry.

Leaving last year's stumbling housing market behind

Friday, January 17th 2025

Leaving last year's stumbling housing market behind

As interest rates ease and job losses climb, New Zealand’s housing market faces a mixed year of modest growth, with conflicting forces shaping the outlook for homebuyers and investors.

Don’t bet on house prices rising faster than incomes

Wednesday, January 15th 2025

Don’t bet on house prices rising faster than incomes

Former Reserve Bank Governor and National Party leader Don Brash says there are grounds for believing that house prices may finally have ended the three-decade period when they rose significantly faster than incomes.