New mortgages with fixed interest rates have continued to rise and have hit a new record high as a share of the mortgage monies advanced, according to Reserve Bank figures.
According to the latest monthly figures in the Reserve Bank's recently introduced data set on new lending fully secured by residential mortgages, September saw floating mortgages continue to sink in popularity.
In its summary of the data highlights, RBNZ said The share of total new residential lending on fixed interest rate terms continued to rise to 82.8%, up from 81.9% in August (Figure 2). This is the highest share on record.
This particular data series, only introduced earlier this year, covers new lending or facilities loaded in the reporting month. This is different to other RBNZ series on mortgage lending, which report new mortgages on the basis of when they have been committed to, rather than when they've actually been taken up.
Since the beginning of this series it has been quite clear that those taking out new mortgages are closely following the 'cheapest' deal they can get in terms of rates.
One and two year mortgage terms are always popular, but more recently there's been a surge of interest, from low levels, in six-month terms.
The RBNZ said new owner occupier lending rose to $4.44 billion in September, up 2.1% from $4.347 billion in August.
One-year fixed terms continue to be the most popular term of owner-occupier lending, accounting for 27.1% of all new lending. But this was down slightly from 27.8% in August.
Two-year terms share rose to 23.5% (from 21.8%), while 18-month terms. The share of lending on 18-month terms rose to 16.4% (from 15.2%).
Six-month term mortgages made up just 5.3% of the owner-occupier new borrowing. However, the numerical total, at $236 million, is the largest amount put on this term since the data series began in April 2021. Does this suggest more buyers waiting to see if there will be some easing in rates in the first half of next year?
The RBNZ said new residential investor mortgage lending was flat at $1.26 billion in September. 1-year fixed terms were the most popular, making up 31.6% of new lending, up slightly from 31.5% in August.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.