One in three new loans came from switching lenders
New Reserve Bank data shows a record number of mortgage customers are changing loan providers, intensifying competition and reshaping New Zealand’s lending landscape.
This surge in refinancing comes as the housing market shows renewed caution. ANZ reported a 0.3% house price dip in June, with sales volumes softening and buyer confidence easing. First-home buyers made up 26% of Q2 purchases, as prices remain 16% below peak and mortgage rates trend lower.
Switching loans hits new high
The Reserve Bank reported that in June 2025, $2.475 billion, or 30% of the $8.261 billion in total new mortgage commitments came from customers switching lenders – a new record in both dollar terms and proportion.
“This is easily a record level both for the amount and the percentage of the total since the start of this particular data series in 2017,” interest.co.nz said.
The number of switchers also hit a record: 3,553 new mortgages in June were changes in loan provider.
Banks under pressure to compete
The high level of lender switching is expected to keep pressure on banks to offer more competitive deals.
“All this is likely to keep the banks on their toes and keep pressure on them to provide ‘competitive’ rates – something the customers are unlikely to complain about,” interest.co.nz said.
The popularity of switching shows no signs of slowing.
“Changing loan providers has been becoming more and more popular and this may well not be the last record we see broken this year,” interest.co.nz said.
Short-term fixes drive refi opportunity
The trend has been amplified by the shift to shorter-term mortgage fixes. Borrowers anticipating interest rate cuts are opting for more flexibility.
“The result is that around $200 million worth of mortgages are either on floating or due to be refixed within the next six months,” the Reserve Bank said.
This dynamic is expected to drive even more “shopping around” among borrowers.
Home buying share drops, but spending up
Refinancing at record levels reduced the proportion of mortgage funds used for home purchases, dropping to a new low of 55.7%.
However, this decline in share masked a sharp rise in actual spending, with $4.6 billion in loans going toward house purchases in June – up more than 40% from the same month last year.
Outlook: More switching ahead
With interest rates expected to continue falling and a large volume of mortgages up for refix, switching activity is expected to stay elevated.
“Still, it will be interesting to see what happens in coming months with the loan provider switching. As said above, we’ve unlikely seen the last of the records this year,” interest.co.nz said.
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