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Record October mortgage lending

Mortgage lending soared to $7.7 billion last month, the highest October figure on record, and further evidence of the red-hot housing market.

Wednesday, November 25th 2020, 4:38PM

The latest RBNZ data shows lending was $1.7 billion higher than the same month last year, as the property market went into overdrive amid record low interest rates and scrapped LVR restrictions.

The figures are the highest on record for an October, based on RBNZ data going back to 2014. Just $5.5 billion was lent to borrowers in October 2018.

First home buyers and investors contributed a good portion of the growth.

FHBs borrowed $1.39 billion, compared to $1.1 billion in October 2019.

Investors were lent $1.89 billion, up from $1.1 billion in October 2019. The figure from last month was the highest value since July 2016. 

The data reflect a surge in investor activity following the Reserve Bank's decision to scrap loan to value ratio restrictions, partly due to the mortgage deferral programme.

The end of LVRs has led to increased confidence among landlords, but fears high-risk lending was increasing volatility in the market. 

High LVR lending to investors, above 70%, rose to $745 million last month, the highest figure since September 2015. 

In contrast, high LVR investor lending was only $186 million in October 2019.

The sharp increase in high LVR lending has prompted the Reserve Bank to bring back LVR restrictions, as of next March.

ANZ, ASB and BNZ have already returned to pre-Covid LVR limits, while Westpac never changed its settings during the crisis. 

Research firm CoreLogic said of the data: "This investor surge has obviously generated a lot of debate in recent weeks, and the hard data certainly helps to illustrate why the RBNZ is consulting on its plan to reinstate the LVR speed limits."

Tags: housing market Lending RBNZ Reserve Bank

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 ▼2.89 3.25 3.39
ANZ Special - ▼2.29 2.69 2.79
ASB Bank 4.45 2.49 2.59 2.65
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.49 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.09 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
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 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.45 2.65
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 ▼3.20 ▼3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.99 3.09 3.15
SBS Bank Special - 2.49 2.59 2.65
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 2.99 3.19 3.29
TSB Bank 5.34 3.29 3.29 3.59
TSB Special 4.54 2.49 2.49 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 2.29 2.69 2.79
Median 4.54 2.93 2.99 2.97

Last updated: 20 January 2021 7:50am

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