Borrowers’ switcheroo reaches new record

The latest RBNZ figures show $2.475 billion of the $8.261 billion taken out in new mortgages last month were by borrowers changing lenders.

In the central bank’s data series, new residential mortgage lending by purpose, which has been running since 2017, it shows switching loan providers has been steadily rising since January this year.

Last month 3,553 of the total of 20,437 new mortgage commitments were for a change in loan provider – also a record. That is more than double the 1,311 borrowers who switched lenders in January 2017.

When compared to June last year, the number of borrowers switching lenders has risen by 58.5% and from May to June this year it has been an increase of 11.6%. And the amount borrowed rose by 1.6% from May.

These numbers are likely to rise as borrowers come off higher interest rates over the next six months and shop around for the best deal that suits them.
FHB figures declining

The total borrowed in new mortgages last month was down 3.8% from $8.6 billion in May, but the total value has increased by 47.1% when compared to June last year.

First home buyers share of new mortgages at $1.521 billion has dropped to 18.4% of the total taken out, down from 19.1% in May. This is a decline from 21.6% per cent in June last year.

Investor lending at $1.799 billion increased 21.8 per cent, up from 21.3% in May and way up from 18.6% in June last year.

The share of new mortgages to owner occupiers – by far the biggest slice of the pie – at $4.843 billion was up to 58.6% from 58.2% in May and up from 57.9% in June last year.

Average new loan values increased to $404,228, up 4.3% from $387,396 in May. Compared to June last year, this amount has risen by 5% from $385,018.

New mortgages for property purchases increased by 33.1% and that of top ups increased by 41% when compared to June last year.

The share of the value of new mortgages for property purchases dropped to 55.7%, down from 59.3% in May, while the share for top ups declined to 10.3%, down from 12.2% in May.