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Speaker 1: Crayon Bridge.

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Speaker 2: You're on News Talk CB. It is seventeen after six.

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Speaker 2: It seems the mortgage wars are on. People are increasingly

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Speaker 2: shopping around for a better mortgage rate. Bank switching has

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Speaker 2: surged in December. Genete Training is The Herald's Wellington Business editor.

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Speaker 2: Good evening, Hey Ryan, Nice to have you on Janey.

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Speaker 2: How much is being moved around here?

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Speaker 1: Well, in December, which is the month that we have

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Speaker 1: the latest dart available for two billion dollars of mortgage

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Speaker 1: debt changed hands between banks and non banks. So that

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Speaker 1: is actually a record amount since at least twenty seventeen

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Speaker 1: when the Reserve Bank started publishing the start. Now, if

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Speaker 1: you look at that two billion dollars as a proportion

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Speaker 1: of all the new mortgage mortgages written during the month,

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Speaker 1: that makes up twenty five percent of that sum. So

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Speaker 1: you know, in dollar terms and in percentage terms, that

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Speaker 1: was really significant. I mean yeah, for the month of December. Now,

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Speaker 1: now we had seen it in prior months similarly large

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Speaker 1: sums of money switch hands between between banks and non banks.

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Speaker 1: Now the Reserve Bank data, doesn't you know, give you

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Speaker 1: a reason for exactly what was going through borrowers minds

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Speaker 1: and why they were doing it. But I talked to

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Speaker 1: loan market mortgage advisor Bruce Patten earlier today and he said, basically,

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Speaker 1: people were chasing chasing lower infrast rates. So you know,

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Speaker 1: they were happy to pay in some instances, happy to

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Speaker 1: pay break fees at their bank and give back any

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Speaker 1: cash incentive that they received from the bank. They were

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Speaker 1: happy to do that to get a better deal from

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Speaker 1: a from a different bank.

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Speaker 2: Right, And do we know where they're coming from and

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Speaker 2: where they're going to? What does the data not get

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Speaker 2: that into that kind of detail.

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Speaker 1: Yeah, the data doesn't get into that kind of detail.

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Speaker 1: Another factor I think with this is that it has

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Speaker 1: been easier for people to switch bank because people have

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Speaker 1: been fixing their mortgages at really short terms like six

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Speaker 1: months or year. A lot of people have also been

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Speaker 1: putting their mortgages on floating rates. So actually in November,

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Speaker 1: which is the month where the newest data for nearly

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Speaker 1: half of new mortgage debt was floating. So you know,

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Speaker 1: if you if a lot of your mortgage is floating

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Speaker 1: on a shorter term, a lot of it will expire.

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Speaker 1: You know, it's easier to get it all to mature

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Speaker 1: at the same time, so you could shift the whole

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Speaker 1: lot to a new bank, you know, because you can't

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Speaker 1: shift part of your mortgage for a new bank and

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Speaker 1: keep part of it at the old bank.

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Speaker 2: So I think that unless you want to cut your

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Speaker 2: house up, of course.

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Speaker 1: Exactly exactly, so, you know, I think that that that

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Speaker 1: has definitely made it easier for people to shift than

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Speaker 1: if you were, say, locked in for two years and

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Speaker 1: you couldn't move because you had two years to go

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Speaker 1: or something like that.

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Speaker 2: Interesting, So that might explain some of the big the

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Speaker 2: big shift that's going on. Are the banks offering Are

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Speaker 2: they being competitive?

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Speaker 1: Well, you know, that's that's the big question at the moment.

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Speaker 1: Bruce Patton thinks it's not not not too competitive with

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Speaker 1: those rates. You know, banks are maintaining their profit margins,

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Speaker 1: so they're cutting as much as they can, but their

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Speaker 1: shareholders are certainly happy, you know, those bank profits have

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Speaker 1: remained elevated. I had wondered as well, whether perhaps people,

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Speaker 1: you know, because there's been so much chat about bank

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Speaker 1: competition and so on, I had wondered whether people who

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Speaker 1: had gone to the mortgage brokers and said, oh, there's

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Speaker 1: all this you know, chat on social media and in

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Speaker 1: the news about bank competition. Can you get me a

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Speaker 1: better deal? But again it's hard to sort of get

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Speaker 1: sort of firm data on that. But Bruce said, you know,

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Speaker 1: people are all over social media on this stuff. So

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Speaker 1: if they're in chat groups and they're on Facebook and

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Speaker 1: they're all chatting about where the best deals are, you

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Speaker 1: know that does prompt a bit more engagement than there

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Speaker 1: would have been. You know back in the day before

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Speaker 1: you could talk about your mortgage rate with your mates

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Speaker 1: online or with strangers in many cases.

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Speaker 2: Exactly to the thank you for that fascinating stuff. Jane Shriney,

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Speaker 2: New Zealand held Wellington Business Editor where us talking about

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Speaker 2: the switcherou that's going on as people try and get

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Speaker 2: better deals, and so they should and it is good

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Speaker 2: that people talk about it. You know, in the workplace

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Speaker 2: when they say don't tell your colleague what you get paid,

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Speaker 2: because then you'll all start a revolution, it's not that

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Speaker 2: rule does not apply outside of the workplace. When it

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Speaker 2: comes to your mortgage. You should tell people what your

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Speaker 2: rate is, and you should tell your friends, and you

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Speaker 2: should join these websites and there's groups now where you

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Speaker 2: can go on and tell people your branch, your bank,

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Speaker 2: and what your mortgage interest rate is, and then the

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Speaker 2: people who live in your neighborhood can go, well, excuse me, Barry,

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Speaker 2: I happen to know that you've given this person this rate,

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Speaker 2: and therefore you should give me the same rate. For

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Speaker 2: more from Heather Duplessy Allen Drive, Listen live to news

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