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Mortgages

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Mortgage applications plummet

The credit reporting company Centrix says Omicron and looming inflation are sapping consumer confidence.

Tuesday, May 3rd 2022, 10:01AM 1 Comment

It says the overall demand for consumer credit is down 6% year-on-year.

Mortgage applications are down 12% and credit card applications are down 35%. Applications for personal loans are down 8%.

And the people who continue to borrow are finding it harder to pay the interest bill.

Debt arrears overall have increased 5% in the year til March, while arrears on unsecured personal loans are up 9%.

Centrix says mortgage and vehicle loan payments are proving to be an exception. Arrears in these sectors remain at consistently low levels, because people are focussing their attention on paying these bills first.

Looking at the value of new loans overall, this was down 30% in March compared with a year earlier.

The value of new mortgages was down 31% while non mortgage lending was down 11%.

And Centrix produced other figures, showing people were opting for longer-term mortgages than previously.

There were 1.4 million mortgages across the country, worth $300 billion.

The negative statistics for mortgages and personal loans were offset to some extent in the business lending sector.

While credit demand also dropped, by 7%, the people who did apply for a loan had a slightly better credit score on average than a month earlier.

This was noted in the hospitality sector which was showing some signs of recovery from the lockdown doldrums.
But tourism and agriculture retained their difficulties in part because of a shortage of labour.

Tags: mortgages

« The big bank we didn't know aboutANZ grows home loan market share and profit »

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Comments from our readers

On 11 May 2022 at 8:15 pm Andy the adviser said:
What we really need is some sort of credit contracts or finance act that protects consumers from themselves. Maybe one that looks at the reality of consumer spending habits in a little more detail to ensure they can actually pay the debt, just like the banks have been doing for years.

This would stop car sales, department stores, appliance stores and other "lenders' from selling consumer finance to willing shoppers.

We need to start protecting consumers from themselves, because, just like the government, fiscal common sense went out the window when credit cards and store cards first made an appearance.

I think we should call the new legislation something like... hmmmm - CCCFA?

That would certainly reduce consumer borrowing and encourage saving instead. Get those pesky loan sharks and BNPL providers out of the way!

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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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