# HL-Q064: Borrower journey

Our household income has dropped and we're worried about keeping up with the mortgage. We haven't missed a payment, but don't have much spare money. What should we do first?

Borrower: Household facing an income drop

[Study](https://nzbrands.ai/research/banking/home-lending/) · Collected 11 October 2026

## chatgpt

Answer ID: a722d1c5-5e29-4040-8fb1-94137015009d

The best first step is **to contact your mortgage lender now, while you are still up to date**. Don’t wait until you miss a payment. In New Zealand, lenders generally have more options to help when they know early that your income has changed. [Consumer Protection](https://www.consumerprotection.govt.nz/help-product-service/borrowing-money/mortgages-and-home-loans?utm_source=chatgpt.com)

A practical order of steps:

1. **Work out your short-term cash position**
   - Write down:
     - current household income
     - mortgage payment amount and interest rate/fixed term end date
     - essential costs (food, power, insurance, transport, rates)
     - debts and minimum repayments
   - The goal is to know: “How much can we realistically afford each month?”

2. **Call your bank’s hardship or financial assistance team**
   Explain that:
   - your household income has dropped
   - you have not missed payments
   - you want to discuss options before you fall behind

   Possible options may include:
   - extending the loan term to reduce repayments
   - changing repayment arrangements
   - a temporary repayment deferral/payment holiday in some circumstances (which can increase the total interest paid) [Consumer Protection](https://www.consumerprotection.govt.nz/help-product-service/borrowing-money/payment-problems?utm_source=chatgpt.com)

3. **Avoid filling the gap with expensive debt if possible**
   Be cautious about using credit cards, buy-now-pay-later, or personal loans to cover mortgage shortfalls. That can make the problem harder to fix.

4. **Get free support early**
   A free financial mentor can help you build a budget, understand your options, and communicate with lenders. [Consumer Protection](https://www.consumerprotection.govt.nz/help-product-service/borrowing-money/payment-problems?utm_source=chatgpt.com)

5. **Check whether you’re eligible for any support**
   Depending on what caused the income drop (job loss, reduced hours, illness, injury, relationship change, etc.), there may be other forms of assistance available.

When you speak with your bank, it helps to have:
- recent bank statements
- proof of income changes
- a list of household expenses
- details of your mortgage and other debts [anz.co.nz](https://www.anz.co.nz/banking-with-anz/financial-hardship/how-to-apply/?utm_source=chatgpt.com)

A few details would help me tailor the next steps:
- Has the income drop come from **job loss, reduced hours, self-employment, illness, or something else**?
- Is your mortgage **fixed, floating, or coming up for refixing soon**?
- Roughly how much has household income fallen (for example, 10%, 30%, or more)?

---

## gemini

Answer ID: 34315a30-31d5-44b6-94a3-f585b009d1cb

Financial pressure on a mortgage can feel stressful, but taking prompt, proactive steps before you miss a payment puts you in the strongest possible position. In New Zealand, banks have dedicated hardship support teams and are legally expected to work with borrowers experiencing genuine financial distress. 

Here is what you should do first:

## 1. Contact Your Bank Immediately
Do not wait until a payment bounces or becomes overdue. As soon as you know your household income has dropped, call your lender's hardship or mortgage support team. 
* **Why it matters:** Banks view proactive contact very favorably. It shows financial responsibility and opens up formal hardship provisions under the Credit Contracts and Consumer Finance Act (CCCFA).
* **What to ask for:** Inquire about temporary relief options, such as switching to interest-only payments for a set period, capitalizing a payment, or a brief payment deferral. 

## 2. Conduct an Urgent Household Cashflow Review
Before you speak with the bank—or as soon as possible after—map out every dollar coming in and going out. 
* **List essentials first:** Mortgage/rent, utilities, groceries, insurance, and transport.
* **Pause all non-essentials:** Immediately cancel or freeze subscriptions, dining out, entertainment, and discretionary shopping. 
* **Check safety nets:** Review if anyone in the household is eligible for Work and Income (MSD) support, such as the Accommodation Supplement or temporary additional support, depending on your income drop.

---

### Recommended Next Steps

To help tailor a realistic budget plan and explore what relief options might fit your situation best, would you like to share a few more details?

<Questionnaire>
  <FormStep selectionType="single" subtitle="Select the option that best describes your loan" title="What is your current mortgage structure?">
    <ListOption label="Fixed rate (currently locked in)" value="fixed_rate"/>
    <ListOption label="Floating / Variable rate" value="floating_rate"/>
    <ListOption label="A mix of fixed and floating tranches" value="split_rate"/>
    <ListOption label="Not sure / Need to check" value="unsure"/>
  </FormStep>
  <FormStep selectionType="single" subtitle="Select your expected timeframe" title="How long do you expect this income drop to last?">
    <ListOption label="Short-term (under 3 months)" value="short_term"/>
    <ListOption label="Medium-term (3 to 12 months)" value="medium_term"/>
    <ListOption label="Long-term or permanent change" value="long_term"/>
  </FormStep>
  <FormStep selectionType="multiple" subtitle="Select all that apply" title="Which expense areas could you trim immediately?">
    <ChipGroup label="Discretionary Spending">
      <Chip label="Subscriptions & streaming" value="subscriptions"/>
      <Chip label="Dining out & takeaways" value="dining"/>
      <Chip label="Entertainment & hobbies" value="entertainment"/>
    </ChipGroup>
    <ChipGroup label="Recurring Bills"/>
  </FormStep>
</Questionnaire>

---

## ai-mode

Answer ID: 9e2d4b84-65ff-477b-ba20-b73e1203a396

Taking the first step early is the best thing you can do. Because your payments are still up to date, you have maximum flexibility and put yourselves in a much stronger position to negotiate support.

Here is what you should do first, ordered from immediate actions to supportive measures:

 1. **Contact your bank immediately**
Don’t wait until you miss a payment. Call your bank’s financial hardship or customer support team (major NZ lenders like [ANZ Financial Hardship Support](https://www.anz.co.nz/banking-with-anz/financial-hardship/how-to-apply/), ASB, BNZ, Kiwibank, and Westpac all have dedicated hardship lines). Tell them your household income has dropped and you want to discuss proactive options.
 2. **Ask about temporary relief options**
Lenders can offer various forms of short-term relief under hardship provisions. Options commonly include temporarily switching to interest-only payments, extending your loan term to lower regular payments, or taking a short-term payment deferral/holiday.
 3. **Tear into a strict triage budget**
Pull your last three months of bank statements and separate every outgoing into essential (mortgage, rates, insurance, basic groceries, power) versus non-essential (subscriptions, dining out, entertainment, discretionary shopping). Pause or cancel all non-essentials straight away to preserve cash flow.
 4. **Check for external entitlements**
Depending on your exact drop in income and family circumstances, you may qualify for government support such as the Work and Income Accommodation Supplement to help offset housing costs.
 5. **Talk to a free financial mentor**
If you want an objective eye on your budget or help structuring a plan to present to your bank, reach out to a free, confidential service like **MoneyTalks** (available via [MoneyTalks NZ](https://moneytalks.co.nz/)).

If you'd like, let me know:

 * Which **bank** your mortgage is with
 * Roughly **how long** you expect this income drop to last

I can help you prepare what to say to your lender or suggest ways to adjust your budget further.