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Mortgages

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More credit woes says Centrix

Mortgage applications are down 19% year-on-year, according to the credit reporting agency, Centrix.

Thursday, April 7th 2022, 1:12PM 1 Comment

by Eric Frykberg

These figures are up to the end of March.

The agency says this trend was accompanied by falling sales and rising listings in the home market.

It also blames inflation pressures, rate hikes and new lending restrictions.

Mortgages are not the only part of the lending industry to be affected.   Demand for consumer credit remains down year-on-year, by 9% til March.

“Omicron and inflation pressures appear to have hit consumer confidence, with many Kiwis uncertain about the future of Omicron and the long-term expectations for discretionary spending,” Centrix wrote

Another factor was falling foot traffic in main city centres because of self-imposed isolation and remote working practices.

The Buy Now Pay Later (BNPL) sector and bank lending were the hardest hit, while auto finance retained its level.

The agency as usual made special mention of the Credit Contracts and Consumer Finance Act (CCCFA).

It said since that act came into effect in December, conversion rates had dropped for all major loan types.

“Lenders appear to have rejected 5% of new applicants who would have qualified in November,” Centrix wrote.

“Hardest hit are credit card applications, which have seen the sharpest drop in approvals in the last 3 months.”

The CCCFA is under review and a draft version of the first tranche of proposed reforms has just been published by the Ministry of Business Innovation and Employment.

« Changes to CCCFA finally revealedReverse mortgages set new record »

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Comments from our readers

On 7 April 2022 at 3:49 pm Amused said:
No surprises to read these latest figures. Everyone knows that the CCCFA changes recommended by MBIE and introduced by this Government last year are the main cause of people currently not been able to secure credit from a bank.

Minister David Clark was quoted on the 17th of February as saying the Government would move fast on any Credit Contracts and Consumer Finance law changes. Now almost 60 days later MBIE wants to put these proposed reforms out to consultation again...

So just who is MBIE consulting with? The banks? Mortgage advisers? The industry has already told the Government and MBIE loud and clear that the changes it made to the CCCFA last year disadvantage the majority of borrowers seeking a home loan. What's the point of going back to the industry again when it has already spoken?

MBIE officials have demonstrated once again that they are bunch of self-serving civil servants adding no value to the public. These are non-elected government officials who are supposed to be acting in the best interest of the taxpayer. They are actually doing the complete opposite now by stalling these proposed changes to the Act until June!

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 5.95 4.85 5.35 5.65
ANZ 5.94 ▲5.95 ▲6.40 ▲6.59
ANZ Blueprint to Build - - - -
ANZ Special - ▲5.35 ▲5.80 ▲5.99
ASB Bank 5.85 ▲5.35 ▲5.80 ▲5.99
Avanti Finance 5.95 - - -
Basecorp Finance 6.95 - - -
Bluestone 5.89 7.49 8.09 8.19
BNZ - Classic - ▲5.35 ▲5.69 ▲5.99
BNZ - Mortgage One 5.94 - - -
BNZ - Rapid Repay 5.94 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.94 ▲5.95 ▲6.29 ▲6.59
BNZ - TotalMoney 5.94 - - -
CFML Loans 6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Co-operative Bank - First Home Special - ▲4.75 - -
Co-operative Bank - Owner Occ 5.85 ▲4.85 ▲5.35 ▲5.65
Co-operative Bank - Standard 5.85 ▲5.35 ▲5.85 ▲6.15
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.95 5.45 -
Heartland Bank - Online 4.10 ▲4.40 ▲4.90 ▲5.10
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.10 5.00 5.75 -
HSBC Premier 5.89 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.25 4.39 5.09 5.45
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 5.50 5.85 6.19 6.39
Kiwibank - Offset 5.50 - - -
Kiwibank Special 5.00 4.85 5.19 5.39
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society 6.45 ▲5.55 ▲6.15 -
Pepper Money 4.49 - - -
Resimac 6.19 5.60 6.16 6.29
SBS Bank 5.79 5.05 5.69 5.89
SBS Bank Special - 4.55 5.19 5.39
Select Home Loans 4.09 4.29 4.86 5.09
TSB Bank 5.59 5.14 5.79 6.15
TSB Special 4.79 4.34 4.99 5.35
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 5.74 4.95 5.75 -
Westpac 5.94 ▲5.95 ▲6.29 ▲6.59
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.94 - - -
Westpac Special - ▲5.35 ▲5.69 ▲5.99
Median 5.85 5.00 5.69 5.99

Last updated: 23 June 2022 9:02am

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