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Mortgage borrowing rebounds in May

New mortgage borrowing rose by roughly $1.6 billion in May as the property market showed signs of recovery from the Covid-19 lockdown.

Thursday, June 25th 2020, 6:52PM

by The Landlord

Total mortgage borrowing hit $4.3 billion last month, up from $2.7 billion in April, according to the latest Reserve Bank data.

The figures reflect a month where most New Zealanders were in lockdown under alert level three, before moving to level two in mid-May.

The data underlines a recovery from the depths of stricter lockdown levels, which halted most property market activity.

Borrowing by first home buyers nearly doubled from April to May, jumping from $484 million to $801 million.

Investors borrowed slightly more than FHBs, $895 million in May, up from $561 million in April.

But owner-occupiers continue to dominate the housing market, borrowing $2.58 billion of the $4.3 billion total.

The May data covers the first month since the Reserve Bank scrapped loan-to-value ratio restrictions. It shows that high LVR lending jumped from $272 million in April to $515 million in May.

CoreLogic senior property economist Kelvin Davidson says that after the enforced break for most mortgage lending activity in April, a rebound was always going to be seen in May.

Activity did indeed recover last month, but perhaps not as strongly as might have been expected, he says.

“Given the favourable conditions for borrowers (eg: banking sector competition and ultra-low mortgage rates), mortgage activity should track along steadily for the next month or two.

“But the winding up of wage subsidies and mortgage payment deferrals are likely to be key tests for the property market as we hit Spring and the final few months of 2020.

Meanwhile, the proportion of new lending on interest-only terms edged down a bit in May, but remains higher than it has for several months, Davidson adds.

“The bulk of this increase has been driven by owner-occupiers, with their loans on interest-only terms accounting for almost 20% of all activity in May.

“There are no surprises here, given that households have been seeking some leeway to reduce their expenses during this tough period.”
 

Tags: CoreLogic coronavirus Covid-19 home loans housing market interest rates Kelvin Davidson landlords Lending mortgages property investment property management RBNZ Reserve Bank

« New-to-bank lending freezeAdvisers buoyed by strong property market »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.75 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 ▼6.74 ▼6.49 ▼6.39
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 8 April 2024 9:21am

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