New Reserve Bank mortgage figures show homeowners paid close to $4 billion in interest during the March quarter, while total scheduled repayments topped $6 billion for the first time since the RBNZ started publishing this data

Latest mortgage figures released by the Reserve Bank have been establishing some records of the arguably 'not nice' variety, depending on your perspective.

Residential mortgage loan reconciliation figures, which the RBNZ has been compiling quarterly since 2014 (so, they don't go back a long way), show that in the March quarter there was a record amount of interest charged, while the amount of loans drawn down was the third-lowest. And one of the quarters that was lower was the June 2020 quarter that included the first pandemic lockdown.

The amount of interest charged during the March quarter was $3.835 billion, which beat the previous high of $3.549 billion for the December 2022, and which compared with just $2.47 billion charged in the March 2022 quarter.

That's right, all those Official Cash Rate and bank mortgage interest rate hikes are having an impact. And it would be reasonable to assume the amount of interest being charged on a quarterly basis is going to keep increasing for a while yet as customers with fixed rate mortgages keep rolling on to higher rates.

While the interest rate bills are going up, there's still no particular evidence from this data that financial stress levels have yet hit problematic levels.

The quarterly scheduled payments bill also reached a new high in the March 2023 (again this just since 2014) of $6.121 billion, but the repayment deficiencies figure, while up at $220 million, was only marginally so. And the deficiencies figures were running higher than that in 2021.

Also, while the amount of excess repayments has decreased to the lowest level in exactly four years it is still well north of the $3 billion figure ($3.38 billion) - albeit substantially down on the peak excess payment amount of $4.444 billion made in the June quarter of 2022.

But while the amounts charged on mortgages have been going up, the stock of mortgages has not been rising anything like in the way we've seen in recent times. The higher interest rates and lower house prices have been taking a toll.

According to the RBNZ figures the total amount drawn down for mortgages in the March quarter was $14.507 billion, with the only lower quarterly figures than that recorded in June 2020 ($14.456 billion) and September 2014 ($13.951 billion) - which was the first quarter recorded in this data series and of course reflected a time when house prices and consequentially mortgages, were much smaller.

Of interest though is that if we look at the RBNZ's separate latest monthly figures for residential mortgage lending by borrower type we can see that in March the amount borrowed exceeded $6 billion for the first time since November 2022 and only the second time since June 2022. The latest monthly figure was up from little more than $3.8 billion in February. And yes, we would expect to see March's figures being higher, but interestingly the RBNZ says that on a seasonally adjusted basis, the March figure was some 7.7% higher than the figure for February 2023.

The March 2023 figure paled in comparison to the $7.3 billion advanced in March 2022 and the stupendous, record, March 2021 figure of just under $10.5 billion. But of course we've come from a crazy hot housing market to one that's now cooled considerably. The latest month's figure compares rather more favourably with the March 2020 (just pre-lockdown) figure of $6.2 billion and the March 2019 figure of $5.8 billion.

The RBNZ says also that the average value of new mortgage commitments across all borrower types rose 8.3% from $334,500 in February to $362,400.  The average value figure had been falling steadily through the past year, having at one point been around $400,000. In January of 2023 it got down to around $320,000.

And separately again to all the above data, banking industry body the New Zealand Banking Association has released its six monthly insights for the period from July 2022 to December 2022.

This showed that the value of new home loans decreased 18.9% in the six months to December 2022.

The NZBA figures showed that there are nearly 1.26 million home loans across 1.09 million customers. The average value of all home loans is $316,019. Of the 45,628 new home loans opened in the last six months of 2022, 26.1% were issued to first home buyers.

NZBA chief executive Roger Beaumont said during this period "almost 45%" of home loan customers were ahead on their loan repayments, although this was slightly down on the previous six months.

"It shows that many people took advantage of interest rates when they were at historic lows. They likely retained their repayments at the same level as before, or increased them, to help repay their loans faster and save on the overall loan cost. It also means that nearly half the people with home loans had built in a buffer that has effectively cushioned the impact of higher interest rates, which we’re now seeing. It’s a double win for them," he said. 

During the latest six month period the NZBA said 12,120 home loans were switched from principal and interest to interest-only repayments.

"That’s just a small fraction – less than 1% – when compared to the total number of home loans," Beaumont said.

He said of all bank customers, and there’s over 9.5 million unique customer accounts, 4286 were granted hardship status, "which once again is a small fraction of the total".

"That’s not to say people are having an easy time. Banks are here to help, and anyone experiencing financial difficulty should contact their bank as soon as possible. The sooner you talk to your bank, the more likely they’ll be able to help," Beaumont said.