Mortgage lending make-up revealed

Of the $5 billion taken out in mortgages last month, property purchases accounted for $3.2 billion, changes in loan provider for $1 billion, top-ups for $0.6 billion and the remainder was for other purposes including bridging finance.

Total borrowing was down $400 million compared with July last year and is only a month shy of two years of declining mortgage lending. 

The value of purchases was down 5% in the year to July, and top-ups were down by 13%, but bank switches were up by 1% as borrowers chase the best deals, which often include cash-backs. Banks are also competitive, wanting to retain existing customers and attract new business.

The average size of a new loan last month was $362,200. For property purchases the average loan was $546,300, falling 7.1% from $587,900 in July last year. For changes in loan provider the average loan size was $600,500 and for top ups it was $104,900.