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Kiwis paying off loans at faster rate: Westpac

Kiwi homeowners are paying down mortgage debt at a faster rate, taking advantage of the extended period of record low interest rates, according to new figures from Westpac.

Thursday, November 22nd 2018, 2:26PM

Simon Power, Westpac

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. 

 

Tags: Reserve Bank Westpac

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 ▲4.45 4.69 4.89
ASB Bank Special - ▲4.05 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼4.15 ▲4.29 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - ▲4.05 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 ▲4.55 4.69 4.99
TSB Special - ▲4.05 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.55 4.69 4.79

Last updated: 17 December 2018 9:03am

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