Mortgages on short-term rates surged again at the beginning of the year
Although fixed interest rates for mortgages are declining, borrowers still opted overwhelmingly for floating and short-term rates up to one year in January.
While new owner occupier lending dropped by 33.5% to $4.1bn in January, compared with December there was still a continued preference for shorter term lending.
Short-term rates surged in November, dropped back in December and then gained in popularity again in January, the latest RBNZ data show.
Of the new lending in January, the share to owner occupiers on floating and short-term rates topped 89.5%. Terms of 18 months and longer accounted for only 10.5% of the lending.
Of the rates, 31.8% of owner occupier mortgages were on floating rates, up from 23.5% in December and 30% were on six-month fixed rates, down from 38.1% in December. These were the most popular rates.
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