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What Holiday Spending Means for Your Mortgage Application
Here’s the good news: as of 31 July 2024, the New Zealand Government relaxed the Responsible Lending Code under the Credit Contracts and Consumer Finance Act (CCCFA).
These changes give lenders more flexibility when assessing your home loan application. While fixed costs like loan repayments and insurance are still scrutinised, discretionary expenses - think takeaways, gifts, and holidays - are now treated with more realism.
So if you went a little overboard on that holiday, it’s unlikely to derail your home loan application.
Why Lenders Don’t Panic Over One-Off Spending
Lenders and Mortgage Advisers know that holidays are unique times of year. That’s why seasonal spending is usually treated as a one-off, not a long-term habit.
We’re often able to explain these one-off expenses as temporary, meaning they won’t carry the same weight as ongoing financial commitments when assessing your application.
Your Track Record Matters Most
When it comes to getting a mortgage approved, banks focus on your overall financial behaviour.
A short-term bump in holiday spending won’t cancel out months (or years) of responsible money management. Consistency counts more than a few indulgent weeks.
Smart Holiday Habits to Support Your Home Goals
While we can help smooth out the bumps, it’s still smart to keep your future home in mind during the holidays. Here are a few ways to stay mortgage-ready:
How We Can Help
As Mortgage Advisers, our job is to present your financial situation in the best possible light to lenders. We understand the nuances of different banks’ criteria and can guide you on how to structure your finances for the best chance of mortgage approval. When it comes time to apply for your home loan, we’ll work with you so we can explain any holiday spending spikes and focus on your overall financial stability.
The truth is, lenders look at your long-term financial habits - not just a one-off season of spending. So if you've been consistent with savings, kept your debt in check, and you're ready to take the next step, that holiday getaway isn’t likely to stand in your way.
👉 Thinking about buying this year? Let’s chat. Whether you’re ready now or just want to understand your options, we can help you prepare with confidence.