Mortgage Payment Relief Already Available

Hon Heather Roy, Minister Of Consumer Affairs
Monday April 6 2009

While the Australian Government has announced a new approach of assisting mortgage borrowers in financial difficulty, New Zealanders should be aware that similar relief is already available under the Credit Contract and Consumer Finance Act, Minister of Consumer Affairs Heather Roy said today.

"Consumers who find themselves in situations of unforeseen hardship - such as loss of employment - and facing difficulty meeting their mortgage repayments can apply to their lender to vary the terms of contract," Mrs Roy said.

"Variation of these terms can include extending the contract term and reducing the amount of each payment due under the contract; postponing the dates on which payments are due, or postponing payments.

"This provision applies to all types of consumer credit contracts, and all lenders - including banks - are free to operate over and above these minimum requirements.

"Consumers must be up-to-date with their repayments in order to apply for hardship provisions, and applications should be made directly to the lender in the first instance of hardship occurring.

"Some banks already have specific programmes in place to assist consumers with over indebtedness, and should a lender refuse to alter the contract the consumer may then apply to the Disputes Tribunal or Court for a decision," Mrs Roy said.