Mortgage borrowers switching to new lenders continues at a steady pace

Switching to a new loan provider is still proving popular for mortgage borrowers.

Thursday, March 27th 2025, 8:48AM

by Sally Lindsay

Switching to a new loan provider is still proving popular for mortgage borrowers.

Reserve Bank February figures show a change in loan provider rose by 34.2% compared to a year ago. That number was also up 21% on January.

From the $5.8 billion total lent on mortgages during February, $1.427 billion was for borrowers switching to a new lender.

That is a 24.4% share of the total, up from 22% during January.

Meanwhile the share of mortgages to first home buyers is dropping.

After peaking at 25.2% in December 2023, mortgages to this group of buyers dipped to 19% last month, down from 20.2% in January and 22.6% in February last year. The 19% share is the lowest since July 2022.

First home buyers borrowed $1.113 billion, up on $1.036 in January and $1.109 in February last year.

Investors, on the other hand, remained ahead of first home buyers in terms of market share, although they dropped to 20.6% from 22.5% in January.

In February last year, investors share stood at just 17.3% after they sat on the sidelines during the Labour Government’s assault on landlords through tax and Residential Tenancy Act changes.

They borrowed $1.207 last month compared to $851 million a year ago.

Other owner occupiers took out mortgages for $3.426 billion in February and their share rose to 58.6% - the same as last year. It was also up from 56.4% per cent in January.

The total of new mortgages was up 14% on a monthly basis and up 19% when compared to February last year.

There were 16,286 new mortgage commitments last month, up 15.3% from 14,122 in January and also up by 13.2% from 14,391 at the same time last year.

The average new loan value across all mortgage types declined to $359,048, down 1.2 per cent from $363,319 in January, but they increased by 5.1% from $341,531 in February last year.

For top-ups the average new loan increased by 15.2% from January and the average value for changes in loan provider increased by 4.7% over the same monthly.

The number of new commitments for property purchases rose by 5.7% and that of top ups increased by 16.9% compared to February last year.

The share of the value of new mortgages for property purchases dropped to 59.3% during February, down from 63.9% in January, while for top ups increased to 13.3%, up from 11% in January.

Tags: first home buyers Mortgages