This has been styled the year of the great mortgage reset because of the huge amount of mortgage money up for an interest rate reset.
And if you are going to reset, well, why not maybe change your loan provider while you are about it?
That's what big numbers of kiwi home owners are doing.
Latest Reserve Bank figures* show that in July, $2.6 billion (28.8%) of the $9.035 billion of 'new' mortgage commitments were people changing loan providers.
The $2.6 billion is a new record in a data series that dates back as far as 2017 and beat the previous record of $2.475 billion set only a month earlier.
In addition, the 3823 new mortgage commitments for change of loan provider in July were also a record.
However, the latest month's monetary tally is not a record in terms of percentage of the total - and that record remains the 30% that was seen for June.
The difference was that the overall tally in July was inflated by a rise of over half a billion dollars (to $5.146 billion) of mortgages for property purchases.
The $9 billion total of mortgage advances was the highest figure since November 2021.
The country's mortgage holders have gone shorter and shorter with their fixed mortgage terms in the past year as they have anticipated mortgage rate decreases.
The result is that something like $200 billion worth of mortgages are either on floating or due to be refixed within the next six months.
Clearly plenty of people have been taking the opportunity to 'shop around' for loan providers.
In the first seven months of this year there's been over $13.6 billion worth of mortgage money that has changed loan providers.
That averages out at $1.95 billion per month.
Customer power is well and truly with us. And it will be no surprises if we see more records set for switching in the remainder of this year.
*Interest.co.nz Property Editor Greg Ninness has concerns over the data contained in RBNZ's c31 and c33 tables and explains his concerns along with RBNZ responses in this article.
2 Comments
Really looks like banks are trying to exploit the hassle of moving bank to continue to make billions. Why would you not look after good customers in tough market conditions...?
What level of success have those here had with getting cashbacks from your existing bank, in order to not switch? And if so is it in line with, or lower than, what you would get from switching? (we switched last time and it was very painless, other than a quick trip to the solicitor to sign the new docs)
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