tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Saturday, May 25th, 1:32PM

Mortgages

rss
Latest Headlines

More pain in store for mortgage holders

The latest Reserve Bank figures show 59% of existing mortgages will move onto higher interest rates in the next 12 months.

Tuesday, April 16th 2024, 11:17AM

For a minority of homeowners that will mean moving off the extremely low fixed interest rates of June 2021, when the average one-year term was just 2.2% and the two-year rate was 2.6%, and for others, who initially repriced at 5-6% having to move another 1-2%, it means a rate with a seven in front of it.

While the bulk of the repricing from the extremely low to higher interest rates has happened, there is more to come.

Of those who are refixing, RBNZ figures show 10% are choosing floating but by far the dominant choice is one year or less on fixed rates, with 56% of new loans across house purchases, bank switches and top-ups being at this level.

It’s a big increase from three months ago, with economists saying it is indicative of people believing bank interest rates have peaked and they will come down by the end of this year or sometime next year. 

RBNZ figures as at February show a total of $356.5 billion in loans secured by residential mortgages. Of this, a paltry $38.3b was on floating interest rates, while the biggest chunk of $318.3b was on fixed rates. And of the fixed interest rate mortgages, $107.8b is due for re-fixing by July 4.

However, stress on mortgage payers is starting to creep up. The latest RBNZ figures show non-performing housing loans rose by $42 million or 2.5% –  a year-on-year increase of $696m to a total $1.72m.

Credit reporting bureau Centrix data reveals the number of mortgages reported in arrears increased to 1.51% in February, with 22,600 mortgage holders behind on their payments, the highest level since January 2020.

Other areas are faring even worse. Many loans have been taken out by people putting their house up as collateral for small-to-medium sized (SME) business loans and in the year to January this year their level of non-performing loans has risen from 0.5% to 1.1% - the biggest increase across the mortgage sector.

Non-performing SME loans stood at $562m in February last year and by February this year that figure was $1.13 billion. As the economy worsens and there is no relief in sight from high interest rates, those figures are expected to increase, even though business lending stock increased by $775m (0.6%) in February.

Many mortgage holders will be interested in tomorrow’s GDP figures to see if inflation is coming down in a way the Reserve Bank hopes so it can start to gear up for OCR, and subsequently interest rate cuts, sooner rather than later.

Housing lending stock rose by 0.2% or $824m in the same month, up on the $452m increase seen in February last year. Owner occupier lending increased by $697m or 0.3, while residential investor lending increased by $127m or 0.1%. The housing lending annual growth rate rose from 3.3% to 3.4%.

Tags: Mortgage Rates

« Financial complaints rise as cost-of-living pressures continueNew mortgage adviser association now officially open for membership »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
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 - 7.14 6.79 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 7.74 7.39 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 - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
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 6.89 6.55 6.35
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 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

Last updated: 20 May 2024 10:01am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com