NZ mortgage update · 27 September 2026
Mortgagee sales are rising in 2026
New figures published on 27 September show mortgagee sales are rising in New Zealand, with 313 properties identified so far in 2026.
What the figures show
More than half — 169 — are in Auckland. There were 387 mortgagee sales across the whole of 2025 and 238 in 2024. On the current trajectory, 2026 is on track to record the highest annual number since 2020. OneRoof
Those figures are concerning, but they also highlight something homeowners need to understand:
A mortgagee sale is generally the end of a financial-distress process, not the beginning.
If mortgage repayments are becoming difficult, acting early can provide more options.
What is a mortgagee sale?
When you take out a home loan, the lender normally takes a mortgage over the property as security.
If the debt isn't repaid according to the agreement and the situation cannot be resolved, the mortgage can ultimately allow the lender to sell the property to recover money owed.
That's a mortgagee sale.
The Banking Ombudsman Scheme recommends that borrowers contact their bank immediately when they begin experiencing financial difficulty, noting that earlier communication gives the bank more ability to consider possible assistance. Banking Ombudsman
Why repayment pressure develops
There's rarely one universal cause.
Today's report includes borrowers affected by employment changes, illness, relationship breakdowns and mortgage repayments that became difficult to maintain.
Some borrowers also bought near the peak of the previous property cycle and now face the combination of higher borrowing costs and a property that may be worth less than expected.
The important distinction is between a temporary cash-flow problem and a mortgage that is fundamentally unaffordable.
Those situations may require different solutions.
Act early and speak to your lender
Don't wait for several payments to be missed.
Start by working out your financial position.
Write down household income, essential expenses, all debt repayments and the size of the expected mortgage shortfall.
Then contact your lender.
Be clear about what has changed and whether you expect the problem to be temporary or ongoing.
That information can help the lender assess what options may be available.
There isn't one standard solution, and lenders aren't required to offer every option to every borrower.
Depending on the circumstances, possibilities can include restructuring the mortgage, extending the loan term, temporarily switching repayments to interest-only, or providing short-term repayment relief.
For example, ANZ's published hardship information says eligible customers may potentially receive short-term loan repayment relief of up to 90 days or have home or personal lending restructured. ANZ Bank New Zealand
ANZ also notes that restructuring could involve increasing the loan term or moving to interest-only repayments temporarily. ANZ Bank New Zealand
Other lenders have their own policies and assessment processes.
Understand the trade-offs
Lower repayments don't necessarily mean lower costs.
Suppose a lender extends the remaining mortgage term.
Your required repayment may fall because you're spreading the principal across more years.
But unless you subsequently increase repayments again, you can end up paying interest for longer.
Interest-only has a similar trade-off.
Your immediate repayment is lower because you aren't paying down principal, but the mortgage balance doesn't reduce during that period. That can increase the total interest paid over the life of the loan.
The objective is therefore not simply to obtain the lowest possible repayment today.
It's to find a sustainable path that takes account of both today's cash flow and the longer-term consequences.
Refinancing and selling
Sometimes borrowers experiencing pressure immediately think about refinancing.
It can be worth investigating, but refinancing isn't automatically available.
A new lender will normally assess income, expenses, existing debts, credit conduct, property security and servicing.
If repayments have already been missed or the household's income has fallen significantly, moving to another mainstream lender may become more difficult.
That's another reason to review the situation early.
Selling voluntarily can sometimes provide more control than reaching a forced-sale position.
But the numbers need to be checked carefully.
The sale price isn't the only figure that matters. You also need to consider the mortgage balance and costs associated with selling and settling the debt.
If the net proceeds aren't sufficient to clear the amount owed, selling the property doesn't automatically eliminate the remaining debt.
Today's OneRoof report describes one individual case where a property sold for $250,000 less than the mortgage balance. That's an extreme example rather than a typical outcome, but it demonstrates the potential risk. OneRoof
Keep the figures in perspective
The numbers shouldn't be overstated.
Mortgagee sales are rising, but they remain a small component of New Zealand's overall property market.
Cotality's September Housing Chart Pack describes the wider housing market as struggling for momentum amid weaker sales, recent mortgage-rate increases and economic uncertainty. It doesn't characterise the entire market as being in widespread distress. Cotality
Mortgagee sales also don't capture every financially stressed homeowner.
Some owners sell voluntarily or with lender assistance before reaching formal mortgagee sale.
Practical next steps
- The first step is to identify the problem early.
- Know your household cash flow and exactly how large the repayment shortfall is likely to be.
- Contact your lender and explain the situation.
- Understand what any proposed restructuring would do to both today's repayments and your total borrowing cost.
- If you're considering refinancing, establish whether another lender is realistically available before relying on it as the solution.
- And if you're considering selling, understand the likely net proceeds before assuming the sale will clear the mortgage.
As a mortgage adviser, Ravinder Chahal at EasyMortgage can help borrowers understand mortgage structures and refinancing possibilities. Where someone is in serious financial hardship, independent budgeting or financial mentoring support may also be appropriate.
Frequently asked questions
What should I do if I can't make my next mortgage payment?
Contact your lender as soon as possible. The Banking Ombudsman specifically recommends speaking to the bank immediately when you're struggling financially. Banking Ombudsman
Can a bank temporarily reduce my mortgage repayments?
Potentially, depending on your lender and circumstances. Options may include restructuring, a longer loan term, interest-only repayments or short-term relief. These aren't guaranteed.
Does interest-only solve mortgage stress?
It may temporarily reduce required repayments, but it doesn't reduce the principal during the interest-only period and can increase the overall interest cost.
Can I refinance if I'm already in arrears?
Possibly, but missed repayments and reduced affordability can make refinancing more difficult. A new lender will still conduct its own lending assessment.
Does a mortgagee sale clear all my debt?
Not necessarily. If the net sale proceeds are insufficient to clear the debt and relevant costs, a shortfall can remain.
Final thought
Recent increases in mortgage rates and ongoing labour-market uncertainty mean household repayment capacity remains worth watching.
But today's data shouldn't be used to predict a wave of forced sales.
For an individual homeowner, the more useful focus is whether their own mortgage remains sustainable — and addressing any emerging problem before it becomes an emergency.
Sources
- OneRoof — Mortgagee sales rising in 2026— published 27 September 2026.
- Banking Ombudsman Scheme — Mortgagee sales guidance— borrower guidance, accessed 27 September 2026.
- ANZ — Financial hardship assistance— lender example, accessed 27 September 2026.
- Cotality NZ — September Housing Chart Pack— published 24 September 2026.
This article provides general information only and isn't personalised financial advice, legal advice or a guarantee that a lender will provide hardship assistance. Lender policies, eligibility and individual circumstances vary.