Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the uptick in mortgage holders switching banks

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Jenee Tibshraeny: NZ Herald Wellington business editor on the uptick in mortgage holders switching banks · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 1: looks Now.
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  Speaker 2: If you've been looking at switching banks, you are not alone.
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  Speaker 2: In fact, the number of people with the mortgage who
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  Speaker 2: have been bank hopping is at a record rate. Donate
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  Speaker 2: to trainee as The Herald's Wellington Business editor. Hey you Nate, Hey,
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  Speaker 2: how many people are we talking about?
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  Speaker 3: Well, we don't know the number of people, but we
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  Speaker 3: know that in July the value of mortgages financed by
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  Speaker 3: a new bank climbed to one point seventy five billion dollars. Now,
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  Speaker 3: that is the highest amount, the most amount of money
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  Speaker 3: since at least twenty seventeen, when the Reserve banks started
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  Speaker 3: publishing the starter. You know, if you slice and dicee
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  Speaker 3: the numbers in another way, look at it proportionately to
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  Speaker 3: the amount of mortgage lending done in July. It was
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  Speaker 3: also at a record high since at least twenty seventeen.
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  Speaker 3: So people are shopping around, right.
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  Speaker 2: And we're talking about just the mortgages or when they
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  Speaker 2: switch and go to a different bank for a mortgage,
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  Speaker 2: taking everything with them, the checking account, of the savings account,
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  Speaker 2: and everything.
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  Speaker 3: Well, that's a really good point, and the data that
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  Speaker 3: I've been looking at doesn't show that that just looks
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  Speaker 3: at the mortgage lending. So I mean, it's quite an
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  Speaker 3: interesting finding at the moment because you know, there's been
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  Speaker 3: so much focus on competition in the banking sector, with
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  Speaker 3: the Commuce Commission coming out saying there isn't enough competition.
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  Speaker 3: I think that what the COMMUSCE Commissions saying is obviously
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  Speaker 3: still very valid. But the thing is is that there
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  Speaker 3: are factors in the current market that are causing this
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  Speaker 3: level of switching. So you know, it's probably fair to
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  Speaker 3: say there could still be more competition, but currently there
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  Speaker 3: are a number of things happening that are pushing people
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  Speaker 3: to bank cop like this.
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  Speaker 2: Does this kind of undermine the case for open banking?
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  Speaker 3: Look, I don't think so. I think that all the
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  Speaker 3: Commuce Commission's recommendations should still be considered seriously. But I mean,
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  Speaker 3: I'll just talk through some of the factors behind this
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  Speaker 3: this bank copying. So obviously, at the moment, people simply
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  Speaker 3: don't want to buy houses. Demand for mortgages is very
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  Speaker 3: low because interest rates are high and people are worried
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  Speaker 3: about losing their jobs. And you know there's a recession
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  Speaker 3: and so on. So banks have been offering quite attractive
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  Speaker 3: cash deals for people who join the bank and take
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  Speaker 3: out a mortgage. That has been causing people to switch.
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  Speaker 3: The other thing is that recently people have been fixing
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  Speaker 3: their mortgages at quite short durations because they've been betting
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  Speaker 3: on interest rates falling soon. So if you fix most
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  Speaker 3: of your mortgage at a short duration and it comes
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  Speaker 3: up for renewal and your whole mortgage you know you
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  Speaker 3: need to refix. It's easier at that point to change
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  Speaker 3: bank than if you fix some for six months and
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  Speaker 3: some for four years, you know, because you can't shift
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  Speaker 3: some of your mortgage to a bank and keep some
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  Speaker 3: of your mortgage at your old bank. So because of
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  Speaker 3: the way people have been fixing it short durations, it's
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  Speaker 3: made it easier for them to change. And you know,
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  Speaker 3: as I said before, banks are competing because business is down.
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  Speaker 2: Jane, it's good to talk to you man. Thank you
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  Speaker 2: so much for running us through that. Jane tip Trainey,
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  Speaker 2: the heralds Wellington Business Editor.
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