How to talk to your bank about hardship and mortgage options

What the law gives you

The CCCFA covers most consumer loans, including home loans, personal loans and credit cards. If you've suffered a hardship you couldn't reasonably have foreseen (for example illness or injury, loss of employment, the end of a relationship, or the death of a partner) and you can't reasonably meet your repayments because of it, you can apply to change the contract. The change has to be one you believe would let you keep up. Lenders must consider the application but don't have to agree. They can't charge a fee for applying, whatever the outcome (a reasonable fee for documenting a change they agree to is allowed). A lender who says no must give written reasons and a summary of your right to ask a court to change the contract.

Step	What the lender must do (working days from receiving your application)
5 days	Acknowledge your application in writing.
10 days	If they need more information, ask for it in writing.
20 days	Decide and tell you in writing. If they asked for information, it's the later of 20 days after the request or 10 days after you send it.

The statutory changes a lender can make are extending the term and/or postponing payments for a set period (a payment holiday). They can't raise your interest rate as part of a hardship change. While your application is being considered, a lender can't start repossession steps on goods held as security (other than goods at risk).

The regulator for these laws changed on 1 July 2026, when oversight of the CCCFA moved from the Commerce Commission to the Financial Markets Authority (FMA). The hardship rules above are published on the FMA's site. Ask MoneyTalks (0800 345 123) if you're unsure how they apply to you.

Mortgage hardship options explained

Extending the term and payment holidays are the changes the CCCFA hardship process provides for. The others below are things lenders commonly agree to voluntarily, so ask, but they aren't a legal entitlement.

Option	What it means	Watch out for
Interest-only period (lender's discretion)	Pay only interest for an agreed time (often 3 to 12 months). Repayments drop, the debt doesn't.	Principal isn't reduced. Payments rise after the period; you may owe the same debt for longer.
Extend the loan term	Spread the same debt over more years, lowering each payment.	More total interest over the life of the loan.
Payment holiday / deferral	Skip payments for a set period. Interest keeps running and is usually added to the loan.	Balance grows. Ask for the exact new repayment and total cost in writing.
Reduced payments (lender's discretion)	Pay a lower fixed amount for an agreed time while you search for work.	May leave arrears. Make sure arrears treatment is agreed.
Capitalise arrears (lender's discretion)	Add overdue amounts onto the loan so you're no longer in arrears.	Debt and interest go up, but you avoid enforcement.
Switch to floating or a different structure	Sometimes done to access flexibility or avoid break fees.	Break fees can apply on fixed rates; ask for a quote.
Sell on your terms	A planned sale beats a forced one.	See the selling assets guide.

'Principal only' means you pay down the original borrowed amount and little or no interest at the moment; this is unusual in practice. The common hardship options are interest-only, longer terms or deferral. Which option suits you depends on how long you expect to be out of work and your equity, so talk to a financial mentor or adviser before agreeing.

Before you call

Have your loan number, current balance and arrears figure.
Know your income and expenses (see the emergency budget guide). Lenders will ask for a budget and may ask for evidence like a redundancy letter or a Work and Income statement.
Decide what you can pay each week or month, even if it's small. A realistic number is better than an optimistic one.
Ask for the hardship team by name; frontline staff are not always trained for it.
Take notes: date, time, name, what was agreed. Follow up by email the same day.

Scripts you can use

Phone opener

Hi, I'm [name], loan number [number]. I've been made redundant and I want to ask for financial hardship assistance under the Credit Contracts and Consumer Finance Act before I miss a payment. Can you put me through to your hardship team, or tell me how to apply?

Email / written hardship request

Subject: Hardship application, loan [number] Dear [Lender], I'm applying under the Credit Contracts and Consumer Finance Act for a change to my repayment terms due to financial hardship. On [date] I lost my job through redundancy. I could not reasonably have foreseen this and I can no longer reasonably meet the current repayments. My current income is [amount] a week from [source]. I can currently afford to pay [amount] per [period]. I'd like you to consider: [interest-only for X months / extending the term / a repayment holiday of X months]. Please acknowledge this application in writing within 5 working days, tell me what information you need, and let me know your decision in writing within the legal timeframe. Please confirm no enforcement will start while it's being considered, and confirm any fees. Kind regards, [Name, phone, address]

If they say no

Can you tell me in writing why the application was declined and which part of my budget wasn't accepted? I'd like to escalate this to your internal dispute resolution team. Can you also give me the name of the external dispute resolution scheme you belong to?

If you're stuck or refused

Complain through the lender's internal process. If unresolved, take it to the external dispute resolution scheme the lender belongs to (all lenders must belong to one; the lender must tell you which). Banking complaints commonly go to the Banking Ombudsman; non-bank lenders belong to other schemes such as Financial Services Complaints Ltd (FSCL). Scheme names and memberships have been changing, so ask the lender which one applies and check on the scheme's own website that it covers your case.
Free support: MoneyTalks 0800 345 123 (text 4029), a Community Law centre (communitylaw.org.nz) or Citizens Advice Bureau (0800 367 222).
If the lender starts mortgagee sale or repossession action, get free legal advice immediately. KiwiSaver hardship withdrawals can be considered if a lender is enforcing the mortgage on your home; see the KiwiSaver guide.

Sources

General information only. Confirm with the agency for your situation. Spotted something out of date? Email help@unemployed.nz.