New mortgage commitments hit multi-year high in March
New Zealand’s mortgage market recorded a major rebound in March, with new home loan commitments reaching $8.488 billion—the highest monthly figure since November 2021, according to the latest Reserve Bank data.
The number of mortgage commitments also surged, hitting 21,915 loans, a level last seen during the pandemic-driven housing boom.
Loan switching fuels market activity
A key factor behind the March surge was a spike in New Zealanders switching loan providers, as borrowers chased better rates and terms in a competitive lending market, interest.co.nz reported.
Data showed that borrowers who switched providers accounted for a record $2.107bn in new mortgage value, surpassing the previous high set in December. The number of switched mortgages also hit a new record at 3,122.
The average size of a loan for those who switched was nearly $675,000, significantly higher than the average for home purchases ($585,000) or all-purpose loans ($385,000), indicating that higher-value borrowers are leading the refinancing charge.
Loan switching now a major share of mortgage activity
Over the 12 months to March, loan switching accounted for $19.545bn, nearly a quarter (24.8%) of all new mortgage activity.
That’s up nearly 50% from the $13.147bn recorded in the previous 12 months, showing that refinancing is no longer just a fringe trend—it’s reshaping the mortgage landscape.
Although the peak monthly share for refinancing was 26.2% in July 2024, March’s figures confirmed that switching remains a strong driver of loan activity, interest.co.nz reported.
Home purchases and first-home buyers also on the rise
Despite the refinancing boom, buying activity is far from stagnant.
In March, $5.149bn worth of mortgages were approved specifically for house purchases—the highest total since December 2021.
There were 8,825 mortgages issued for home purchases that month, and across the 12-month period ending March 2025, $48.86bn was advanced for house purchases—a 20% rise from the previous year.
First-home buyers also made gains. Their share of mortgage commitments rose to 19.7%, up from a recent low, and they secured $1.67bn in loans, the highest monthly total for this group since November 2021. The number of loans to FHBs also hit a high of 2,943.
Investor activity hits four-year peak
After lagging behind FHBs in recent years, investors are re-entering the market. The $1.779bn advanced to investors in March marked their highest monthly total since March 2021.
Investor commitments rose to 3,310, the most since April 2021.
Their share of the mortgage market reached 21% in March, maintaining momentum since overtaking first home buyers in August 2024. Investor interest has grown steadily, helped by falling mortgage rates and policy changes such as the reversal of the extended bright-line test and reinstatement of interest deductibility.
Interest costs drop for the first time since 2021
On existing mortgages, the cost burden is easing slightly. RBNZ’s loan reconciliation data showed that interest charges on all outstanding mortgages dropped to $5.571bn in the March 2025 quarter—the first decline since Q3 2021.
However, across the full year to March, New Zealanders paid a record $22.616 bn in mortgage interest, the highest annual total since this dataset began in 2014.
For comparison, only $10bn was paid in the year to March 2022, when interest rates were still near historic lows.
The increase in interest charges reflects not only higher rates over recent years but also a larger national mortgage balance, which grew from just over $330bn in March 2022 to more than $370bn by March 2025.
