A record number of mortgage holders switched banks in June, with refinancing activity hitting its highest level since data collection began in 2017, according to the latest analysis from Kelvin Davidson, Chief Property Economist at Cotality NZ.
More than 3,500 existing borrowers refinanced their home loans during the month, accounting for nearly $2.5 billion in lending, a clear reflection of the short-term nature of current mortgage structures and the relatively low cost of switching lenders.
These figures, drawn from the Reserve Bank of New Zealand’s June lending data, represent a substantial lift in refinancing, surpassing all prior monthly highs.
Mr Davidson noted that the rise in switching is likely being driven by a combination of factors: increased engagement with mortgage advisers, growing borrower awareness of competitive loan offers, and banks continuing to offer attractive cashbacks.
The current environment, with nearly 14% of loans on floating rates and another 39% fixed but due to roll off by the end of 2025, has left a significant number of borrowers well positioned to switch lenders without incurring break fees.
“Mortgage holders are clearly paying close attention to rates and terms,” Mr Davidson said, adding that this refinancing trend is likely to persist in the near term as more borrowers come off fixed rates.
Overall, the Reserve Bank data showed NZD$8.3 billion in new mortgage lending for June, up $2.6 billion from the same month in 2024, which was unusually soft.
Both investors and owner-occupiers contributed to the increase, with first home buyers (FHBs) continuing to show strong activity.
According to Cotality’s Buyer Classification data, FHBs remain the dominant group among low-deposit borrowers, accounting for 75–80% of all owner-occupier lending done with less than a 20% deposit.
Interest-only lending remains well below past peaks, with 15% of owner-occupiers and 35% of investors using this structure, down from around 30% and 50% respectively in 2017.
Mr Davidson notes this suggests interest-only loans are not currently being used to manage financial stress, unlike during the COVID period.
The rise in refinancing comes at a time when property sales have broadly returned to normal levels in NZ. This is beginning to ease stock levels, with some vendors actively withdrawing listings.
While this could spark mild price competition, Mr Davidson suggests any value gains will be modest given ongoing economic uncertainty.
