Lending slashed in January as borrowers rushed for new deals in December

The $6 billion total was the lowest since January last year, with most 2025 months hovering in the $8 billion range and hitting  $9 billion in July.

During the cashback offer period a record 41.1% of borrowers changed to new lenders, but this dropped back to 33.8% in January, However, it was the second highest share on record.

The average value of mortgages for home owners switching to a new lender rose by 0.7% between December and January, while the number of new mortgages taken out rose by 66.3% compared to January last year.

A big flurry of mortgage switching is still expected. For the rest of the year 68% of fixed rate mortgage loans will reprice. For all borrowings, including floating, it’s 72%, the BNZ says.

The rest of the half year is the period in which mortgage term expiries are most pronounced relative to average. There’s approximately $132 billion worth, or 34% of total borrowings. The long-run average is 27%.

Investors were lent more than first home buyers in January. They took out $1.3 billion in mortgages compared to $1.064 billion by first home buyers.
While investors might have taken out a bigger monetary share than first home buyers, their share of new mortgages dropped slightly to 21.6% from 21.7% in December and from 22.5% in January last year. 

First home buyers were in a better position, with their share of new mortgages increasing to 17.7% in January, up from 15.3% in December, but it was an annual drop from 20.2% in January last year. 

All mortgages taken out by first home buyers hit a record average of $599,437 in January. However, 51.8% of loans to first home buyers were low equity – the first time since the Reserve Bank’s data series started in 2014 that figure had passed the 50% level.

Low equity mortgages approved to first home buyers hit an average of $656,148 in January.

Although fewer loans were approved, the total value of loans to first home buyers rose to $1.064 billion at the beginning of the year from $1.036 billion in January last year, up 2.7%.

New mortgages to other owner occupiers declined to 59.4% or $3.5 billion, down from 62.3% or $8.7 billion in the previous month. In January last year their share was 56.4% or $2.891 billion.

Across all borrowers the average new loan value dropped to $396,140 in January, down 19.2 % from $490,025 in December. Compared to January last year, the average value increased by 9% from $363,319.

More than 15,200 new mortgages were lent, down 47% from 28,705 in December. Compared to January last year, this was an increase of 7.8% from 14,122 mortgages.