NZBA says many borrowers are in a “relatively good position”
Half of the people with home loans are ahead on their repayments, according to the New Zealand Bankers’ Association (NZBA).
According to Roger Beaumont, chief executive at NZBA, data collected and aggregated from NZBA’s 10 main retail member banks showed that 50% of home loan customers are ahead on their repayments.
“That says a lot about the financial capability of people with a mortgage. They think it’s a good idea to repay your loan faster if you can,” said Beaumont.
He attributed this result to the “historically low interest rate environment” over the past few years, especially since borrowers often choose to maintain the level of their repayments if interest rates go down.
“Many borrowers are in a relatively good position to manage the cost of borrowing, which may rise gradually in response to changing economic conditions,” said Beaumont. “Nearly 55% of home loan customers are on fixed interest rates, with the rest split between a mix of fixed and floating interest rates and only floating. That means any interest rates rise won’t have a widespread immediate impact on borrowers.”
NZBA data also found that 1.1 million bank customers have a home loan, with the average value of all home loans being $271,000. Meanwhile the average value of new home loans is $340,000.