Property
The value of home loans on floating mortgages down almost NZ$14 bln since last April's peak as borrowers punt on fixing
1st Mar 13, 4:02pm
by
By Gareth Vaughan
The move by home loan borrowers towards fixed-term interest rates and away from floating rates continues with the total value of mortgages on floating rates now down nearly NZ$14 billion since the peak in April last year.
The latest Reserve Bank data shows the value of home loans on floating rates at NZ$95.981 billion as of the end of January. That's down NZ$13.7 billion, or 12.5%, since April 2012 when a total of NZ$109.677 billion worth of mortgages were floating.
Last April marked the high point for floating mortgages since the Reserve Bank started tracking fixed versus floating data in 1998 with 63% of all home loans at that point floating. The most recent figures, for January, show 53.2% of mortgages by value floating, and NZ$84.23 billion, or 46.7%, fixed. The balance, NZ$109 million, was recorded as unallocated.
On a percentage basis floating mortgages are down from 53.9% in December with fixed up from 46.1%.
Word out of the banks themselves of late suggests a strong customer preference for fixing. Westpac's head of retail banking, Ian Blair, recently told interest.co.nz about 70% of home loan customers taking out new loans, or rolling over existing ones, were choosing fixed-term ones. And ASB CEO Barbara Chapman said about 65% of borrowers taking out home loans with ASB were choosing to fix.
In terms of the January figures for fixed mortgages, the biggest lumps of money are fixed for less than a year and between one and two years at NZ$40 billion and NZ$34.3 billion, respectively.
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1 Comments
Again it just goes to show that Headlines can be mis-leading without actually taking the time to sit down and digest the gist of the message. In effect this latest data does nothing more than to re-inforce what everyone knows, (and is doing with their feet) and that is mortgages are not going to go up in the short term,. Homeowners are fixing short term to get a better lending rate than being offered by Banks with their floating rates.
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