The number of home loans past due reached 21,600 in the June quarter, according to credit bureau Centrix.
This was 300 fewer overdue home loans than in May and lower than in March, which saw an eight-year-high with 23,700 home loans past due.
In Centrix’s latest Credit Indicator report, released on Friday, data showed a “modest improvement” in the June quarter with mortgage arrears at 1.41% in June. This was at 1.58% in the previous quarter.
'Many borrowers may benefit from lower rates'
Increased refinancing activity played a role in the rise of mortgages enquiries which went up 16.7%.
Centrix's managing director Keith McLaughlin says; "with 79% of mortgages due to be repriced over the next 12 months, many borrowers may benefit from lower rates".
Approved new mortgage lending has seen an increase to 21.2% in the June quarter compared to the same time last year. But this is 13% below the same period in 2021, Centrix says, during a time when the property market was booming.
The report says “this reflects increased market activity and borrowers increasingly looking to refinance for lower rates”.
This comes as bank mortgage switching has hit a new high. Latest Reserve Bank figures show in June $2.475 billion (30%) of the $8.261 billion of 'new' mortgage commitments were people changing loan providers.
And with the latest annual inflation rate a touch below what economists had forecasted, this paves the way for the Reserve Bank (RBNZ) to make a cut to the Official Cash Rate (OCR) in August - and even possibly in October.
The OCR is currently at 3.25%.
On their website, the RBNZ says the OCR sets the interest rates on the deposits and loans banks have with them, which impacts home loan interest rates for borrowers.
Breaking down residential mortgages
Centrix says there are 1.2 million people who have a residential mortgage.
Of this, 117,000 borrowers owe more than a million dollars on their home.
“The average mortgage size is now $518,000, up 3.4% over the past year. Auckland has the highest regional average at $688,000," the report says.
According to the report, the average mortgage for a new first home buyer is up 4.6% from a year ago, slightly below the market peak in early 2022, but up 64% since the beginning of 2018.
The average age of mortgage holders is now 49.2 years and has been gradually rising over the past few years, Centrix says. And the average age of borrowers when the loan term ends is currently 68.
3 Comments
"average age of borrowers when the loan term ends is currently 68."
Average. Doesn't leave much time for saving for a retirement.
68! Wow. That is tragic.
So the 'average' Kiwi householders have to work into their retirement before buying their way out of that noose around their necks.
For some, they only get that 'relief' at the point of inheriting from the estate of their parents, so would otherwise have potentially still faced another decade at the coalface trying to pay off that mortgage, and the overseas trips, and the needless home renovations and the uneconomic car(s).
There will obviously be many others that never get to outlive their obligation to the banks.
My heart aches for them. They have no idea what they're missing by being the banks slaves in perpetuity.
I'm surprised Centrix does this detail on mortgages. Did they just get this from RBNZ? The figure I find interesting is "117,000 borrowers owe more than a million dollars on their home." I'm just wondering how many are "true" million in the capital of the mortgage and how many of the 117,000 have capital with accumulated interest outstanding. I like how MT has presented these figures.
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