Clever Kiwis took advantage of low rates to get ahead on their mortgage

Home owners are doing a good job of managing their mortgage repayments, according to the New Zealand Bankers’ Association.

During the six months to December 2021, 44% of borrowers were ahead on their mortgage, while only 2% were behind.

NZBA chief executive Roger Beaumont said the reason so many borrowers are in such a strong position is because, as interest rates fell over the past few years, they may have retained their repayments at the same level. 

“Depending on their loan, others may have increased their repayments further to get ahead and repay their loan more quickly,” he said.

“This shows good financial capability among people with home loans. It also means they’re quite well placed in an environment of rising interest rates.”

Meanwhile, the size of the average new home loan taken out during the six months to December 2021 was $407,000.

First home buyers took out about a quarter of all new home loans.

Looking at the entire loan book (i.e. both new and old loans), 61% of borrowers had a fixed-rate loan, 20% had a variable loan and 19% had a split loan (i.e. part fixed and part variable).

These findings were based on data provided by the NZBA’s 10 main retail member banks.

Credit cards, savings accounts and bank apps

Here are five other key numbers provided by the NZBA:

  • $2,000 – the average monthly spend per credit card
  • 69% – the share of credit cards that are paid off in full without incurring any interest
  • $18,000 – the average amount in each savings account
  • 91% – the share of transaction accounts that don't charge monthly fees
  • 66% – the share of bank customers who have registered for mobile banking apps

If you need advice about managing your home loan, please give me a call.