The country's big five banks are projecting that non-performing loans as a share of their lending could more than double from current levels over the next year, according to the Reserve Bank (RBNZ). "Households have been able to adapt by reducing discretionary spending and working with their banks to manage the increased debt servicing burden. "While household incomes have grown strongly in recent years, further increases in interest rates may result in a larger rise in loan defaults. "While shorter-term mortgage interest rates have continued to climb, longer-term rates have generally stabilised over the past six months. Pockets of stress are likely to emerge globally as debt servicing costs continue to increase."

Source: Stuff November 01, 2023 05:36 UTC