The bank says two-thirds of its customers are ahead on their mortgage repayments, a median average of $8,653, according to the bank. Westpac says customers have taken advantage of cut price rates to pay off as much of their home loans as possible.
The trend seems to be more pronounced in the south island's Nelson, Tasman and Marlborough regions, which are 20 and 15 months ahead respectively. Aucklanders are also ahead by about 9 months, or a median of $14,400.
The figures show customers are taking steps to de-risk before the OCR begins to climb. Recent guidance from the Reserve Bank indicates an OCR hike in the final months of 2020.
Simon Power, Westpac NZ's GM of consumer banking, said customers could save on their interest payments by increasing fortnightly: "If people are able to increase the amount they repay each fortnight or month by $50, $100 or even $200 when they re-fix, it can make a substantial difference to their overall interest savings.”
The low-rate environment for homeowners got even better in recent weeks as a host of major banks slashed their one year rates to below 4%, levels not seen in generations. BNZ and ANZ led the way over the weekend with significant cuts.
It comes as the market heads into the busy Spring period, and the market speculates whether the Reserve Bank will loosen LVR restrictions at its latest Financial Stability Report next Wednesday.