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Clients switching to three-year terms; Lending hits $8.5 bn in June

Mortgage adviser clients are choosing three-year fixed mortgages in anticipation of rising interest rates, according to a new survey: [READ ON]

The home lending market remains red hot months on from the Government's housing market reforms, with June lending surpassing $8.5 billion: [READ ON]

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Westpac cuts interest-only term

Westpac NZ has reduced its interest only lending term from 15 years to a maximum of five years

Tuesday, July 12th 2016, 10:16AM

It said it made the move as investors continued to dominate the housing market.

Interest-only terms are popular with property investors, who usually focus on paying down the mortgage on their own homes first.

Reserve Bank figures released late last month show more than 40% of new mortgages by value are interest only and in Auckland 47% of the lending in May was to investors.  The move by Westpac follows the bank’s decision last month to stop lending to offshore-based investors.

Simon Power, GM Consumer Bank and Wealth, said the reduced term for interest only home loans was to provide customers with a checkpoint at the end of the interest-only period to assess if they were still comfortable with and able to meet their obligations.

“With the way market conditions are we see this as a prudent and timely move. The last thing we want is for customers to overstretch and get into difficulty while interest rates are at historic lows,” Power said.

“This gives the customer the opportunity to reassess their needs and financial situation.”

The move brings Westpac into line with BNZ and ASB.

A BNZ spokeswoman said: "We continually review all our lending criteria including our interest-only polices. As highlighted in recently published RBNZ data, we note the overall market proportion of new interest-only lending is at 41% – BNZ’s proportion of interest-only lending is significantly lower than this. Our current policy is to allow interest-only lending to a maximum term of five years. However, under special circumstances by exception we may allow up to a term of ten years.

 

Tags: Westpac

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.15 2.35 2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 19 July 2021 9:09am

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