The questions and original answers

First, take a breath — you’re doing the right thing by dealing with this before you miss a mortgage payment. In your first year of homeownership, it can be surprisingly difficult to adjust to the real cost of owning a home, especially when rates, insurance, council rates and everyday expenses all add up.

In New Zealand, there are steps you can take while your payments are still up to date. The most important thing is to act early, be upfront with your lender and avoid waiting until you’re forced to choose which bills to pay.

What to do now, in order

1. Contact your mortgage lender this week

Tell them your repayments are becoming difficult to manage, but you haven't missed any payments and want to get ahead of the problem.

Ask whether they can review options such as:

• Extending your mortgage term to reduce regular repayments.
• Temporarily switching to interest-only repayments.
• Restructuring your loan or changing repayment frequency.
• Reviewing your interest rate, especially if your fixed rate is due to expire.

These options can increase the total interest you pay or have other costs, so ask for the effect on both your weekly repayments and the total loan cost. You don't need to wait until you're in arrears to ask for help.

2. Work out the actual shortfall

Look at your last one to two months of bank transactions and write down:

• Household income after tax.
• Mortgage payments.
• Essential expenses: food, power, transport, insurance and rates.
• Other debt repayments and minimum payments.
• Irregular home costs, such as repairs and maintenance.

The goal is to work out whether you're short by $50 a week, $200 a week, or more. That tells you whether small changes could help or whether you need a formal mortgage adjustment.

Don't cut essential insurance or skip other important bills without understanding the consequences.

3. Get free, independent help

In New Zealand, MoneyTalks offers free, confidential financial mentoring. They can help you put together a budget, prioritise bills and work out how to approach your lender.

• Call 0800 345 123
• Text 4029
• Visit moneytalks.co.nz

You don't have to be in serious debt to use the service.

4. Protect the essentials and avoid quick fixes

Prioritise housing, food, power, essential transport and insurance. Check whether you're entitled to any support through Work and Income, depending on your circumstances.

Be particularly careful about taking on credit-card debt, buy-now-pay-later balances or high-interest loans to cover the mortgage. These may make this month easier while making next month harder.

A useful thing to know about hardship in NZ

If an unexpected event — such as losing income, illness or a relationship breakdown — is contributing to your difficulties, you may be eligible to make a formal hardship application. Depending on your circumstances, you can ask for an extended loan term, a payment deferral or both. Approval isn't automatic, and a deferral can increase the amount you owe. See the Financial Markets Authority's hardship guidance. Hardship applicationsHardship and financial difficulty

Even if you don't qualify for formal hardship relief, you can still talk to your bank about other options.

Let's work out what might help most in your situation

You don't need to share exact account details. If you're comfortable, tell me a little about these two things:

1. What's putting the most pressure on your budget?

• The mortgage repayments themselves are too high.
• Rates, insurance and other homeownership costs are higher than expected.
• Groceries, bills and general living costs have increased.
• Our household income has dropped or become less reliable.
• It's a combination of these.

2. Roughly how much are you short each week or fortnight?

• Under $100
• $100–$300
• More than $300
• We're not sure yet, but there's almost nothing left after bills.

With those two answers, I can help you prioritise the next steps and identify which options are most worth exploring before you miss a payment.