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Mortgages

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Mortgage borrowing hits a high

Mortgage borrowing hit $350 billion for the first time in June.

Wednesday, August 2nd 2023, 6:00AM

by Sally Lindsay

The latest Reserve Bank data shows housing lending stock rose 0.3% or $1.2 billion in June, which was up on the $799 million in May and bigger than the $1.1 billion increase in June last year.

This was the biggest monthly increase since November last year.

Registered banks lent $344 billion in June while mortgages taken out with non-bank lenders reached $5.5 billion.

Business lending stock rose by $497 million or  0.4% in June, but annual growth dipped for the seventh consecutive month, down to 3%.

Arrears fall

Meanwhile mortgage holders seem to be holding their own against higher interest rates. Mortgage arrears and consumer credit defaults are down slightly, data from Centrix shows.

In June mortgage delinquencies fell to 1.29% of mortgages in arrears compared to 1.32% in May and the pre-pandemic peak of 1.55%.

There are 18,400 mortgages past due, up 34% on a year-on-year basis as more mortgage holders face rising interest rates and cost-of-living challenges. Many have rolled off fixed low interest rates of about 3% to higher rates of 6-7%.

The highest mortgage arrears are in Opotiki district at 2.9%, Waitomo district 2.79% and the Far North at 2.73%.

While new mortgage borrowing was down 13% in June, the rate of decline is slowing and Centrix managing director Keith McLaughlin says this could be an early signal the market is beginning to turn.

Businesses struggle

For businesses, however, the outlook is not so bright. There has been a climb in credit defaults across the board in the last month, with company liquidations up 36% year-on-year. Defaults were up in the property/rental sector +35%, retail trade +20%, hospitality +16%, construction +16% and transport +10%.

It’s clear business owners in construction, retail trade, hospitality, property/rental are feeling the pinch of this current economic climate, McLaughlin says. 

“This has the flow on effect impacting employees and their finances, contributing to an overall challenging financial situation for households across the country.”

He says many business owners will be grappling with the uncertainty of what lies ahead for the remainder of this year, wondering whether their suppliers and customers will remain cash flow positive to meet their own outstanding debt repayments.

While arrears have been rising across all credit sectors, it is younger people who have been feeling the most stress For the first time, Centrix has included an index of how different age groups of borrowers have fared compared to January 2020.

It shows consumers under 25 have been hardest hit by the soaring cost of living and are more likely to experience issues with cash flow. By contrast, loan arrears amongst people 40 or over have fallen.

Tags: mortgages

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.49 7.35
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 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 - 7.29 6.85 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 ▼7.89 ▼7.45 ▼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 - ▼7.09 - -
Co-operative Bank - Owner Occ 8.40 ▼7.29 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.79 7.39 7.25
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 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

Last updated: 1 March 2024 10:00am

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