Cashbacks rather an interest rates the fight for banks

Compared to other countries, New Zealand’s banks infighting is mainly on cashbacks rather than interest rates in the mortgage sector.

CoreLogic research head Nick Goodall told a Financial Services Institute of Australasia (FINSIA) webinar on insights into New Zealand property, that interest rates might not quite be as competitive from a mortgage perspective as they could be.

“We are seeing the cashback programmes strong as those banks look to fight and pay for new mortgages in the short term, but not have that flow through their books in the form of interest rates either.”

He says it is an interesting dynamic as the way banks are funded in New Zealand plays out a bit differently than in some other parts of the world. “We see much more infighting on the cashbacks than we do necessarily in the interest rates.”