New Zealanders Owe $608.7 Billion As Household Debt Nears 1.5× The Size Of The Economy

New MoneyHub Analysis Shows Housing Debt Now Dominates New Zealand’s Financial System

New Zealanders now owe a combined $608.7 billion in non-government debt - equivalent to $117,054 per person - according to new analysis of Reserve Bank data by personal finance research website MoneyHub.

The research shows that housing debt alone totals $388.5 billion, accounting for 64% of all debt, while New Zealanders collectively pay an estimated $41 billion a year in interest to lenders.

“New Zealand has quietly become one of the most debt-heavy housing markets in the developed world,” said Christopher Walsh, Founder of MoneyHub. “Debt has grown nearly five-fold in 25 years, while population growth was just 35%. The imbalance is stark - and it explains why interest rate changes hit households so hard.”

Key findings from the analysis include:

• $608.7 billion in total non-government debt outstanding (November 2025)
• $388.5 billion in housing debt - 64% of total debt, up from 50% in 2000
• $142.0 billion in business debt (23%)
• $63.5 billion in agricultural debt (10%)
• $14.7 billion in personal and consumer debt (2.4%)
• $41 billion per year paid in interest across all debt types
• Debt-to-GDP ratio of 138%, meaning total debt is almost 1.5× the size of New Zealand’s economy

Although personal debt represents a small share of total borrowing, it remains the most expensive.

“Personal debt is only 2.4% of the total, but it generates around $2.2 billion in interest every year,” Walsh said. “Dollar-for-dollar, it costs three to four times more than mortgage debt. This is why paying off credit cards and personal loans first almost always makes financial sense.”

Housing Debt the Central Risk

The analysis shows housing debt has risen from $64.7 billion in 2000 to $388.5 billion in 2025, a 500% increase over 25 years. During the COVID period alone, mortgage debt increased by nearly $54 billion in just two years, fuelled by record-low interest rates and rapid house price growth.

“At today’s mortgage rates, New Zealand households pay roughly $21 billion a year in mortgage interest,” said Walsh. “When rates were around 2.5% in 2021, that cost was closer to $10 billion. The doubling of rates has meant a doubling of interest costs - that’s a massive transfer of household income to banks.”

Non-Bank Lending on the Rise

The report also highlights a structural shift in lending, with non-bank lenders now providing 48% of personal lending, up from 35% in 2010.

“Competition isn’t a bad thing, but non-bank lenders often charge higher rates and face lighter regulation,” Walsh said. “Borrowers need to compare carefully and understand exactly what they’re signing up for.”

What Happens Next?

MoneyHub’s analysis suggests debt levels are likely to continue rising, but at a slower pace than the last decade. Housing debt growth has moderated from 11% in 2021 to 5.6% in 2025, reflecting higher interest rates and stabilising house prices.

“The direction of future debt growth depends almost entirely on house prices,” said Walsh. “If prices surge again, mortgage debt will follow. If prices stagnate, debt growth slows. The data makes that relationship very clear. We have published a house price prediction guide to explain more”.

The full analysis, including 25 years of historical data, interest cost estimates, and sector-by-sector breakdowns, is available in MoneyHub’s guide New Zealand Debt Statistics.

Data Source

Reserve Bank of New Zealand (RBNZ): C5 Sector Lending data (housing, personal, business, agriculture)

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