Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the rise in people shopping around for better mortgage rates

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Jenee Tibshraeny: NZ Herald Wellington business editor on the rise in people shopping around for better mortgage rates · Best of Business

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  Speaker 2: You're on news Talk SEB. It is seventeen after six.
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  Speaker 2: It seems the mortgage wars are on. People are increasingly
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  Speaker 2: shopping around for a better mortgage rate. Bank switching has
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  Speaker 2: surged in December. Gnats Training is The Herald's Wellington business editor.
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  Speaker 2: Good evening, Hey Ryan, Nice to have you on Janey.
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  Speaker 2: How much is being moved around here?
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  Speaker 3: Well, in December, which is the month that we have
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  Speaker 3: the latest start available for two billion dollars of mortgage
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  Speaker 3: debt changed hands between banks and non banks. So that
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  Speaker 3: is actually a record amount since at least twenty seventeen,
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  Speaker 3: when the Reserve Banks started publishing the starter. Now, if
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  Speaker 3: you look at that two billion dollars as a proportion
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  Speaker 3: of all the new mortgage mortgages written during the month,
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  Speaker 3: that makes up twenty five percent of that sum, So
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  Speaker 3: you know, in dollar two and in percentage terms, that
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  Speaker 3: was really significant. I mean yeah, for the month of December. Now,
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  Speaker 3: now we had seen it in prior months similarly large
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  Speaker 3: sums of money switch hands between between banks and non banks. Now,
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  Speaker 3: the Rezero bank data doesn't, you know, give you a
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  Speaker 3: reason for exactly what was going through a borrowers' minds
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  Speaker 3: and why they were doing it. But I talked to
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  Speaker 3: loan market mortgage advisor Bruce Patten earlier today and he said, basically,
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  Speaker 3: people were chasing chasing lower infrast rates. So you know,
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  Speaker 3: they were happy to pay in some instances, happy to
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  Speaker 3: pay break fees at their bank and give back any
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  Speaker 3: cash incentive that they received from the bank. They were
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  Speaker 3: happy to do that to get a better deal from
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  Speaker 3: a from a different bank.
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  Speaker 2: Right, and do we know where they're coming from and
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  Speaker 2: where they're going to? What does the data not get
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  Speaker 2: that into that kind of detail?
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  Speaker 3: Yeah, the data doesn't get into that kind of detail.
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  Speaker 3: Another factor I think with this is that it has
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  Speaker 3: been easier for people to switch bank because people have
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  Speaker 3: been fixing their mortgages at really short terms, like six
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  Speaker 3: months or a year. A lot of people have also
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  Speaker 3: been putting their mortgages on floating rates. So actually in November,
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  Speaker 3: which is the month where the newest data for nearly
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  Speaker 3: half of new mortgage debt was floating. So you know,
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  Speaker 3: if a lot of your mortgage is floating on a
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  Speaker 3: shorter term, a lot of it will expire, you know,
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  Speaker 3: it's easier to get it all to mature at the
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  Speaker 3: same time, so you could shift the whole lot to
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  Speaker 3: a new bank, you know, because you can't shift part
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  Speaker 3: of your mortgage for a new bank and keep part
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  Speaker 3: of it at the old bank.
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  Speaker 2: So I think that unless you want to cut your
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  Speaker 2: house up, of course.
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  Speaker 3: Exactly exactly, So you know, I think that that has
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  Speaker 3: definitely made it easier for people to shift than if
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  Speaker 3: you were, say, locked in for two years and you
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  Speaker 3: couldn't move because you had two years to go or
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  Speaker 3: something like that.
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  Speaker 2: Interesting, So that might explain some of the big shift
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  Speaker 2: that's going on. Are the banks offering are they being competitive?
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  Speaker 3: Well, you know, that's that's the big question at the moment.
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  Speaker 3: Bruce Patton thinks it's not not not too competitive with
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  Speaker 3: those rates. You know, banks are maintaining their profit margins,
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  Speaker 3: so they're cutting as much as they can, but their
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  Speaker 3: shareholders are certainly happy, you know, those bank profits have
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  Speaker 3: remained elevated. I had wondered as well whether perhaps people,
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  Speaker 3: you know, because there's been so much chat about bank
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  Speaker 3: competition and so on, I had wondered whether people who
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  Speaker 3: had gone to the mortgage brokers and said, oh, there's
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  Speaker 3: all this you know, chat on social media and the
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  Speaker 3: news about bank competition, can you get me a better deal?
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  Speaker 3: But again it's hard to sort of get sort of
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  Speaker 3: firm data on that. But but Bruce said, you know,
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  Speaker 3: people are all over social media on this stuff. So
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  Speaker 3: if they're in chat groups and they're on Facebook and
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  Speaker 3: they're all chatting about where the best deals are, you
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  Speaker 3: know that that does prompt a bit more engagement than
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  Speaker 3: there would have been, you know back in the day
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  Speaker 3: before you could talk about your mortgage rate with your
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  Speaker 3: mates on online or with strangers exactly today.
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  Speaker 2: Thank you for that fascinating stuff. Jenatsbtraeney, New Zealand held
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  Speaker 2: Wellington Business Editor with us talking about the switcheroo that's
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  Speaker 2: going on as people try and get better deals, and
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  Speaker 2: so they should and it is good that people talk
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  Speaker 2: about it. You know, in the workplace when they say
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  Speaker 2: don't tell your colleague what you get paid because then
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  Speaker 2: you'll all start a revolution, it's not that rule does
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  Speaker 2: not apply outside of the workplace. When it comes to
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  Speaker 2: your mortgage. You should tell people what your rate is,
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  Speaker 2: and you should tell your friends and you should join
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  Speaker 2: these websites, and there's groups now where you can go
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  Speaker 2: on and tell people your branch, your bank, and what
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  Speaker 2: your mortgage interest rate is. And then the people who
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  Speaker 2: live in your neighborhood can go, well, excuse me, Barry.
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  Speaker 2: I happen to know that you've given this person this rate,
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  Speaker 2: and therefore you should give me the same rate.
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