The amount of money Kiwis signed up for in home loans is up – and new low mortgage rates are likely to boost the amount even more.

As HSBC releases new industry low home loan rates of 3.79%, the latest figures from the Reserve Bank show home loans for the year to April went up $80 million.

But investor lending is still going down, when compared to last year, says Kelvin Davidson, senior property economist for data company CoreLogic.

Interest-only lending is still subdued, especially for investors, says Davidson.

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“It’s not only that new interest-only loans have become harder to secure, but also that banks are more reluctant to roll over existing loans, often preferring a switch to a normal repayment mortgage.”

He says that part of the rise in owner-occupier lending is due to growing high loan-to-value ratio (LVR) lending to first-home buyers, despite a slowdown from the previously very rapid rates.

“The growth in lending in April was driven by larger average loan sizes,” he says.

Meanwhile, banks are still playing it safe, and not pushing their limit of having only 20% of all lending to owner-occupiers with an LVR of over 80%. In fact, the ratio is sitting at only 12.6% of high LVR lending.

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Published 21 May 2019

This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser. All content is correct at time of publication date.