The number of New Zealanders with a mortgage over $1 million has grown 15 percent in a year, reaching 134,000. At current interest rates, a $1m mortgage costs roughly $5,754 per month to service. The rise reflects larger loans taken during periods of low rates and high property values.
The number of New Zealanders carrying a mortgage above $1 million has increased sharply again, with the latest data showing 134,000 homeowners now fit that description — up 15 percent from a year earlier, according to RNZ's reporting on the Centrix data.
The figure comes from credit bureau Centrix, which tracks mortgage arrears and lending patterns. In 2019, fewer than 51,000 people had a mortgage that size. The growth has been steady: by 2022, that number had risen to 100,000. Now, just three years later, it has reached 134,000. Joint borrowers who jointly own property may be counted twice.
The trend reflects a structural shift in New Zealand's housing market. Centrix chief operating officer Monika Lacey said the growth in seven-figure mortgages corresponded with periods of low interest rates — during and after the Covid pandemic — and again more recently as buyers adjusted to higher rates while still borrowing large amounts.
"At those points in time where we've had a sudden growth period, that was where we had lower interest rates over Covid and then again towards the end of last year, people are taking advantage of those situations," Lacey said.
The cost of servicing a $1 million mortgage is now significant. At a rate of 5.62 percent — roughly the current average for a 30-year fix — monthly repayments would be around $5,754. A $2 million mortgage would cost roughly $11,500 per month under the same terms. There are 18,000 borrowers with mortgages above $2 million, up from about 5,000 in 2017 and 13,000 in 2022.
Why the stock of big mortgages keeps growing
Infometrics chief forecaster Gareth Kiernan said the lag between house sales and changes in the mortgage stock was longer than many assumed. Not every buyer of a $2 million house takes out a $2 million mortgage, but once the loan is in place, it takes many years of repayments to bring the balance below that threshold — even as house sales volumes fluctuate.
The Reserve Bank has increasingly used debt-to-income ratios rather than loan-to-value limits to manage mortgage lending, which means borrowers with smaller deposits are now more common. Kiernan said that reflected the RBNZ's view that house prices were within sustainable levels and that borrowers with properly assessed income should be able to absorb interest rate increases. Westpac earlier told RNZ that one in six of its new mortgages were for more than $1m, illustrating the scale of high-value lending across the banking sector.
Simplicity economist Shamubeel Eaqub said the geographic distribution mattered — most high-value mortgage growth was concentrated in expensive markets like Auckland and Queenstown. Provided borrowers had the income to service the debt, large mortgages were not necessarily a problem in themselves.
Arrears improving, but not for everyone
Centrix data showed household arrears were trending downwards. The proportion of people behind on payments fell to 11.25 percent in April, from 11.72 percent the month before. The total number in arrears was 443,000 — 9.5 percent lower than a year earlier.
Residential mortgage arrears specifically improved to 1.29 percent, from 1.39 percent the previous month. There were 21,100 home loan accounts past due, a 13 percent year-on-year improvement. Lacey said the improving trend was supported by better economic conditions.
For first-home buyers, the average loan size was slightly lower than the $560,000 recorded earlier in the year — a rare bright spot amid otherwise growing debt loads.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.