The questions and original answers

If your household income has fallen and you're worried about keeping up with your mortgage, contact your lender as early as possible and ask for its financial hardship team. In New Zealand, you can ask your bank or other mortgage lender to consider changing your repayments, and you don't necessarily need to have missed a payment before you start the conversation. Mortgages and home loansPayment problems

The key is to explain what has changed, what you can realistically afford now, and whether you expect your income to recover.

1. What help can you ask your lender for?

There are several options worth discussing. Some are formal hardship arrangements; others may be repayment adjustments your lender offers.

1. Temporarily reduce your repayments

Ask whether you can make lower repayments for a set period. This may help if your income has dropped but you can still afford to pay something each month.

2. Take a mortgage repayment holiday

Ask to pause repayments for an agreed period if you cannot currently afford them. Check whether interest will continue to accrue and how much extra you could owe afterwards.

3. Extend the mortgage term

Spreading repayments over a longer period can reduce the amount due each month. However, you may pay more interest over the life of the loan.

4. Agree on a plan for missed payments

If you are already behind, ask whether the arrears can be repaid gradually alongside an affordable ongoing repayment arrangement.

These are recognised options under New Zealand's formal hardship process, although approval depends on your circumstances and the applicable rules. Payment problemsHardship applications

You can also ask your lender to review your current loan structure and explain the costs of any proposed change. Don't assume that interest will be waived during a repayment holiday.

2. What information will your lender need?

Prepare a straightforward picture of your household finances. Your lender will want to understand both why your income has fallen and what repayments you can afford going forward. The exact documents depend on the lender and your circumstances. Payment problemsWhat lenders must do

Here is a practical checklist.

Preparation checklist

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Evidence of your reduced incomeRecent payslips, employer letter confirming reduced hours or redundancy, benefit statements, or updated business accounts if self-employed.

Your household incomeCurrent income for both homeowners, if applicable, including wages, benefits, rental income and other regular income.

A household budgetEssential spending such as food, power, rates, insurance, transport, childcare and medical costs.

Mortgage and other debtsMortgage balance, current repayments, interest rate, fixed-rate expiry if relevant, arrears, credit cards, personal loans and other debt commitments.

Bank statementsRecent statements showing income, spending and existing financial commitments. Ask your lender how many months it requires.

Your proposed repayment arrangementHow much you can afford to pay each week, fortnight or month, how long you expect the difficulty to last, and when your income might recover.

Tip: Be honest about what you can afford. A realistic budget that shows a shortfall is more useful than promising repayments you are unlikely to manage.

3. How to make a formal hardship application in New Zealand

Under the Credit Contracts and Consumer Finance Act, you may qualify for a formal hardship application if an unforeseen event — such as losing your job, illness or injury, or a relationship breakdown — means you cannot reasonably meet your repayments, but you believe a change to the loan would allow you to do so. Hardship applications​​Credit Contracts and Consumer Finance Act

A general fall in income is worth raising with your lender, although not every reduction in income will qualify under the formal hardship rules.

If you apply formally:

• Apply in writing, using the lender's hardship form, email or letter.
• The lender must acknowledge your application within five working days.
• If it needs more information, it must request that within 10 working days.
• If it does not need further information, it must generally make and communicate its decision within 20 working days.

There are eligibility rules and deadlines, particularly if you have already fallen behind or received a formal notice. Don't delay making contact while you gather paperwork. Hardship applications​​Credit Contracts and Consumer Finance Act

4. A message you can send your lender

You can start with the following and adjust it to your situation.

Email

Subject
: Request for mortgage repayment assistance

Kia ora,

Our household income has reduced, and we are concerned about our ability to maintain our current mortgage repayments.

We would like to discuss the options available to help us manage our mortgage while our financial circumstances have changed.

Our current household income is approximately $[amount] per [week/fortnight/month], compared with $[previous amount]. We believe we can currently afford mortgage repayments of approximately $[amount] per [week/fortnight/month].

The reduction in income is due to [brief explanation], and we expect this situation to [continue until / be reviewed around] [date, if known].

Could you please explain what repayment arrangements may be available, including temporarily reduced repayments, a repayment holiday, extending the loan term, or a formal hardship application?

Please also let us know what supporting documents you require and how any proposed changes would affect our interest costs, loan balance and future repayments.

We would appreciate discussing this as soon as possible.

Ngā mihi,

[Your names]

5. If the lender cannot offer a workable solution

You don't have to navigate this alone.

• Free financial mentoring: MoneyTalks can connect you with a financial mentor who can help prepare a budget and negotiate with lenders. Call 0800 345 123 or visit MoneyTalks. The role of financial mentorsContact
• Independent complaints support: If you believe the lender has handled your application unfairly, use its internal complaints process first, then consider its external financial dispute resolution scheme.
• Act quickly if you receive a formal notice: Get advice promptly, because deadlines can affect your hardship options and the steps the lender may take towards a mortgagee sale. Mortgages and home loansHardship applications

Let's narrow this down to your situation

The best approach depends on whether the income drop is temporary or likely to continue, and whether you are already struggling to make repayments.

Has your household income fallen temporarily (for example, reduced hours or a gap between jobs), or has it dropped more permanently? That will help me suggest which options to raise with your lender first.