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Mortgages

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DTI borrowing at lowest levels since 2017

The Reserve Bank could be weeks away from introducing debt-to-income restrictions.

Tuesday, May 21st 2024, 6:26AM

by Sally Lindsay

Meanwhile the levels at which borrowers are taking out new mortgages indicate they won’t make any difference, according to the central bank’s latest figures.

Data for the March quarter this year reveal 41,056 mortgages were taken out, an 11.5% increase on the final quarter of last year, totalling $14.4 billion. This is down from $17.6b lent in the final quarter of last year.

In the March quarter, 31% of the mortgages were at a DTI of five.

This is well below the RBNZ’s proposed limits allowing banks to lend 20% of new residential mortgages to owner-occupiers with a DTI of more than six and for 20% for investors with a DTI of more than seven.

Had DTIs been introduced four years ago, they would have halted the market frenzy of 2020-2021, when lending by banks at high DTI levels accelerated. They have since retreated substantially and will not be binding when the central bank, which says it wants them in place by mid-year, introduces them.

During February this year, 29.2% of new mortgages had a DTI of five – the lowest monthly share since data collection began in 2017.

In the first quarter, 22.6% of new mortgages to first home buyers (FBHs) had a DTI of 5 – the lowest share for FBHs since the RBNZ started collecting data.

Compared to March last year, when the share to FBHs with a DTI of 5 was at 28.4%, this is an annual drop of 5.8%.

The quarterly share of lending to FBHs with a DTI of 5 and loan-to-value (LVR) of 80% dropped to 6.2% from 9.3% in the first quarter of last year.

The gross income of FBHs, the amount a bank is prepared to count in its servicing analysis and can include the income of more than one person, was $151,300 for the quarter, up 1.1% from $149,700 in the same quarter last year.

A similar story has been repeated by other owner-occupiers with investment collateral. Mortgages with a DTI of 5 were lent to 48.9% of these owner-occupiers in the first quarter, but during February this share was 40.9% – also the lowest since data collection began.

For investors, the share at a DTI of 5 was up to 46.5% for the first quarter from 42.4% in the final quarter of last year.

For borrowers who had a DTI of 7 there was 7.4% of lending in the March quarter, up from 6.1% in the final quarter of last year. The highest share was in January 2021 when a whopping 26.5% of new mortgages were with a DTI of 7.

Tags: DTIs

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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 7.74 7.35 6.99
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 7.65 7.25 -
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 ▼7.09 ▲6.95
SBS Bank Special - 7.14 ▼6.49 ▲6.35
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 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 19 June 2024 3:59pm

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