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Number of borrowers ahead on repayments dips slightly

Despite high interest rates, more than 43% of home loan borrowers are ahead on their loan repayments, compared to 1.4% who are behind and more than 11,000 loans switching to interest only.

Friday, October 13th 2023, 10:36AM

by Sally Lindsay

The New Zealand Banking Association says it shows that many people with home loans are managing relatively well.

“Those paying more than their minimum repayments have likely built in a cushion in case their circumstances change. It also means they’re paying off their debt faster,” Roger Beaumont, New Zealand Banking Association chief executive says.

The association’s figures in its six monthly retail banking data insights show there were nearly 1.25 million home loans across 1.08 million customers in June. The average value of all home loans was $323,463. Of the 40,438 new home loans opened, 26% were issued to first home buyers.

About 11,090 home loans switched from principal and interest to interest-only repayments. This is slightly down from the previous six months when 12,120 home loans made that switch.

Of all bank customers, and there’s more than 9.5 million, 5,655 were given hardship assistance by their bank. That’s up 1,369 customers from the previous six months.

The number of borrowers behind in their loan repayments has lifted to 1.4% compared with 1.23% behind in the previous six month period ended December last year And during the same period the number of customers ahead with repayments has dropped to 43.7% from 44.7%.

More than 65% of people with a credit card are paying off what they owe without incurring any interest cost, down on the 67.4% in the previous six month period.  That shows a high level of financial capability among credit card holders, Beaumont says. The average monthly spend on each credit card declined to $2,004 from $2,121 at the end of December.

“While the rise in the cost of living is hitting many households hard, borrowers are also affected by the sharp rise in the cost of borrowing from historic lows, driven by global conditions and the Reserve Bank’s efforts to reduce inflation by raising the official cash rate.

“Banks are here to help, and anyone experiencing financial difficulty should contact their bank as soon as possible. The sooner you talk to your bank, the more likely they’ll be able to help,” says Beaumont.

Beaumont says savers are responding to rising interest rates. “For a long time, when interest rates were at an historic low, people who relied on income from bank deposits got relatively low returns. Now that interest rates are up, people are investing more in term deposits. The value of term deposits increased by 8.1% to $154 billion, with an average balance of $107,900.”

Average interest rates on term deposits increased from 3.19% to 4.9% over the period, while average interest rates on savings accounts increased from 2.42% to 3.59%.

Tags: Mortgage Connect

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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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