Mortgage holders big switch to new lenders tapers off

In December after the main banks launched a limited 1.5% cashback offer for new mortgages, a record $5.7 billion (41.1.%) of the $14 billion taken out was for a change to a new lender.

However, the number of new mortgages for a change in loan provider increased by 12%
compared to February last year.

While the cashback offer was a big incentive and had advisers’ phones constantly ringing, many mortgage holders with loans on floating or short-term fixed rates got a wake-up call when the RBNZ slashed the OCR to 2.25% in November and at the same indicated it was the end of its cutting spree.

The financial markets did not react well and wholesale interest rates moved up in December and have continued to do so. The RBNZ has attempted to cool the market and kept the OCR at 2.25% with the proviso it will move if the oil shock from the Israel and US war with Iran cause inflationary impacts.