Bank switching sends mortgage figures to highest level in three years

Personal Finance / news

Latest Reserve Bank figures show of more than $8 billion of new mortgage commitments in December, over $2 billion was customers swapping loan providers

29th Jan 25, 3:45pm by David Hargreaves

Source: 123rf.com

A surge of customers switching banks for their mortgages pushed monthly mortgage new commitment figures up to a three-year high in December.

Latest monthly figures from the Reserve Bank (RBNZ) show new mortgage commitments in December totalled $8.113 billion.

That was up from $7.412 billion in November, and up a whopping 53% on the $5.304 billion for December 2023.

The December 2024 figure was the highest seen since the $9.121 billion in November 2021 at the tail end of the pandemic housing boom.

The RBNZ's separate 'lending by purpose' data series shows $2.062 billion of the new mortgage commitments - roughly a quarter - were a result of changes of loan provider.

It's the highest amount of mortgage money swapped in a month since the RBNZ started this particular data series in 2017. It's also among the highest amount swapped in terms of percentage of total, at 25.2%, with the most in a month being 26.2% recorded earlier in the year.

But it wasn't all about swapping. The month also saw the highest amount of mortgage money committed for property purchases ($4.913 billion) since December 2021.

In looking at the total amount borrowed in December 2024 of $8.113 billion, investors took $1.69 billion, first home buyers (FHBs) $1.611 billion, and other owner-occupiers $4.731 billion.

While numerically the FHB grouping borrowed the most in December since November 2021, this grouping's percentage of the overall monies advance actually dropped below 20% (to 19.8%) for the first time since July 2022.

And that 19.8% share of the overall mortgage monies for the FHB's compares with a 25.2% share in December 2023, which to date is the record share for the FHB's in this series, running since 2014.

The share of new commitments to investors decreased to 20.8%, down from 21.6% in November. But investors' figures have generally been rising in the closing months of 2024, overtaking the FHBs.

The investors' share of the mortgage money really started surging in August 2024, with the grouping that month overtaking the amount borrowed by first home buyers (FHBs) for the first time in two and a half years.

The share of new mortgage commitments to other owner-occupiers increased to 58.3% in December, up from 56.9% in November.

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12 Comments

by RookieInvestor | 29th Jan 25, 3:53pm 1738119195

RE sales volumes up, new mortgage lending up, that would suggest more buyer activity would it not?

by Chaosinflesh | 29th Jan 25, 4:48pm 1738122480

As long as a house is being sold for more than it was purchased for, new lending will be up.

The recent losses are probably well-overpowered in this regard by the older property being sold off, given the average length of ownership is over 7 years. House with 300k mortgage becomes house with 700k mortgage => higher mortgage lending.

Slight exception if the mortgage had been extended as an ATM, but even in that instance there's likely a tonne of headroom.

by salamanderhunter | 29th Jan 25, 4:54pm 1738122890

A house being sold for more than it was purchased for does not necessarily answer it.

It is also possible that people are purchasing houses for less than the previous purchase price, but they have a higher debt to equity ratio than the vendor had prior to sale. This is doable as interest rates have reduced, allowing for higher borrowing.

by stjohn | 29th Jan 25, 5:01pm 1738123271

Good. The more switching the better. We need competition in our extremely non-competitive market.

I moved from kiwibank to ASB ( who had lost share in 2024 and bounced back in Q4 of 24) after they were most aggressive on rate and cashback. If they had a cushy position they wouldn't have offered me the best rate and CB at the time of refixing.

Still waiting on KB to actually get competitive and get into the double digits for HL lending ( around 8-9% at last check). Until they do, I won't swap back..

by Getting it right. | 29th Jan 25, 5:27pm 1738124849

Good luck with ASB! Since they canned individual lending managers for their mortgage and business customers and moved to having "teams" a few years ago now, you are lucky to be dealing with a 21 year old kid who can't put an email together and has no idea or interest in your business relationship with the ASB.

So unless your banking relationship is worth a significant 7 digits to them, you probably made a bad move with the ASB.

by sadr001 | 29th Jan 25, 6:07pm 1738127232

We actually left ASB about 4 years ago because of the individual mortgage manager. Trying to get anything done if your manager goes on maternity leave or only works part time is very time consuming and risky for time critical transactions.

Even trying to go through the regular banking channels you ended up referred back to your manager. If not for that terrible experience we likely would never have even gone looking at other banks and settled on ANZ. ANZ still has us with a fixed manager but she is much better than the one at ASB at the end of our time with them. Having to change banks just to get a better manager was distressing.

by nigelh | 30th Jan 25, 8:30am 1738179006

Its over 10 years since I had a mortgage with ASB and both my mortgages were with them after having been rejected by KB. They were paid off within ten years. Since the late 80's early 90's I've taken the attitude with banks that they give you an umbrella when the sun shines and take it away when it rains and if you want loyalty buy a dog, don't expect any from you bank even if you think you've been loyal. You just a number now. Business banking may be different.

I'd probably be classified as a less desirable customer now that I only have some savings with ASB.

by Hummy | 31st Jan 25, 8:06am 1738263988

You so right.

by stjohn | 30th Jan 25, 9:12am 1738181530

Haha that's what my mortgage broker is for! He can deal with the kid.

Yes it's worth north of 7 figures, so somewhat valuable. I'll shift again when my 3 year clawback lapses.

by Shoebox Charlie | 30th Jan 25, 12:25pm 1738193116

Only just been told we have lost our premium banker with ASB (via letter), seems like banks are discouraging person to person relationships! I'm going to look at Co-op now, unless there is someone here who may object to my new proposed matrimony?

by MikeM | 30th Jan 25, 9:03am 1738181002

"The RBNZ's separate 'lending by purpose' data series shows $2.062 billion of the new mortgage commitments - roughly a quarter - were a result of changes of loan provider."

If this is the case, why aren’t the values of the mortgages that have been closed not deducted so we're looking at a net figure?

by NinaK@interest | 4th Feb 25, 7:57am 1738609079

Much of the profits from the banking sector go overseas and the debt created in the housing market including investors is now around 90% of GDP or $360 billion. Quite how we can continue to pay the interest and repay seems to be overlooked. It appears to be a pension Ponzi scheme of sorts. If someone wants to point out how this can be resolved I would like to know. It seems that there is no limit to how much the banks will lend and no consideration that this debt maybe unrepayable and will burden nz into a future of poverty