Christmas spending and your mortgage application: what the bank sees on your statements

Examples are illustrative: card limits assessed at 3% a month, 7% assessment rate, 30-year term. Lenders differ, and your numbers will too.

Every January I get calls from people who found the right house over the holidays and want to move fast. A lot of them have spent December doing what everyone does: presents, a trip away, a new TV in the Boxing Day sales. None of that is wrong. But some of it ends up on the statements a credit assessor reads a few weeks later, and some of it costs borrowing power.

Why your December statements matter

When you apply for a home loan, the lender doesn’t just take your word on your spending. It reads your transaction accounts, usually the last three months and sometimes six. Apply in February and the assessor is scrolling through December and January.

That’s also when household finances are most stretched. Credit bureau Centrix reports that consumer arrears follow a “typical post-holiday peak” every year. In January 2026 they rose to 12.56% of the credit-active population, up from 12.07% in December, and personal loan arrears hit 10.2%, the highest in a decade (Centrix Credit Indicator, February 2026). Lenders know this pattern, and they read January statements with it in mind.

What lenders look for on your bank statements

Nobody is judging your gift list. An assessor is checking:

• that your income comes in when and how you said it does
• that your living costs roughly match what’s on your application
• whether you have commitments you didn’t mention, like Afterpay or Zip instalments, a Q Card, or payments to a finance company
• whether you’re managing: overdraft use, dishonoured payments, regular cash withdrawals or gambling transactions
• that your deposit has been saved over time and is still there

Anything that looks like new debt gets added to your commitments. Commitments reduce what the bank will lend, and since July 2024 they also count toward the Reserve Bank’s debt-to-income limits.

What common Christmas debt does to your borrowing

The rule of thumb: at a 7% assessment rate over 30 years, every $100 a month of commitments takes roughly $15,000 off what you can borrow. To see where you stand, try the borrowing calculator.

The Christmas traps I see most often

A new card or a higher limit

Stores and banks push credit hard in November. A new card means a new credit enquiry on your file and a new commitment. A limit increase you never use still counts at around 3% of the limit a month. I go through how each type of debt is assessed in how credit cards, Afterpay and car loans affect what you can borrow.

Buy now pay later for the presents

It feels like nothing at $25 a fortnight. On a statement it’s a commitment, and some assessors read a run of instalments as cash flow being tight. Buy now pay later has also been covered by the Credit Contracts and Consumer Finance Act since 2 September 2024, so providers now run credit checks when you sign up (MBIE). If you’ve used it, finish the instalments and close the account.

Boxing Day finance

“No interest for 24 months” on a fridge or TV is still a loan. It shows on your credit file, and the repayment counts against you for the whole term.

January overdraft

Plenty of people dip into overdraft in January. One dip isn’t a disaster. Living in it for three months straight gets questions.

Spending the deposit

Most lenders want to see genuine savings, especially at low deposits. If $5,000 comes out of the house fund for a holiday, it changes both how much deposit you have and how your savings history looks. If you’re buying with 10%, see 10% deposit home loans for what lenders expect.

What won’t hurt you

Spending more in December than in March is normal, and assessors know it. “In my experience a one-off spike, with a short explanation if it’s large, is rarely the problem,” says Yatin Kainth, Financial Adviser at Mortgage Sense. “What causes trouble is new debt, and a pattern of running out of money before payday.”

A good adviser will spot anything unusual before the application goes in and explain it up front, rather than waiting for the assessor to ask.

An 8-week plan to keep Christmas from costing you

1. Check your card limits now and lower the ones you don’t use in full. Get written confirmation.
2. Set a Christmas budget and pay for it from your everyday account, not new credit.
3. Don’t sign up for any new buy now pay later or store finance, even interest free.
4. Leave the deposit account alone, and keep your regular savings going, even at a smaller amount.
5. If Afterpay or Zip is already running, finish the instalments and close the account.
6. Talk to an adviser before you apply, so any December spending is explained up front.

If you’ve already been turned down once, home loan declined covers the usual reasons and what to fix.

Common questions

Where these figures come from

• Centrix Credit Indicator, February 2026 (January 2026 arrears data)
• MBIE, buy now pay later and the CCCFA
• Reserve Bank of New Zealand, debt-to-income restrictions

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This article is general information only and isn’t personalised financial advice. Figures are illustrative and based on the assumptions shown. Lender policies change regularly. Mortgage Sense is a trading name of Yatin Kainth, a Financial Adviser (FSP1007497) providing advice under the Mortgage Managers licence (North West Group Holdings Ltd, FSP682791). See the Disclosure Statement.