Banks switch focus to refinancing

They are offering cashbacks on loans and could even move to slash their mortgage interest rates over the next year as a big chunk of mortgage holders come off their low fixed interest rates taken out over the past couple of. years.

CoreLogic’s latest Buyer Classification report shows about 48% of loans are fixed and due to be refinanced in the next 12 months.

To entice new customers, Kiwibank is offering 1% of any new home loan as a cash contribution, up to $10,000 while Westpac is offering $5,000 for new home loans over $500,000. Kiwibank says its offer is aimed at putting more money in the back pocket of customers at a time when living costs are rising.

A 28.4% fall in house sales over the year to the end of May has prompted the banks to focus on refinancing and borrowers can expect better deals if they shop around.