1 00:00:00,240 --> 00:00:02,120 Speaker 1: Now, if you've been looking at switching banks, you are 2 00:00:02,160 --> 00:00:04,560 Speaker 1: not alone. In fact, the number of people with the 3 00:00:04,600 --> 00:00:07,560 Speaker 1: mortgage who have been bank hopping is at a record rate. 4 00:00:07,800 --> 00:00:10,200 Speaker 1: Do younate to trainee as The Herald's Wellington Business editor, 5 00:00:10,240 --> 00:00:13,200 Speaker 1: Hey you Nate, Hey, how many people are we talking about? 6 00:00:13,880 --> 00:00:15,760 Speaker 2: Well, we don't know the number of people, but we 7 00:00:15,880 --> 00:00:20,840 Speaker 2: know that in July the value of mortgages financed by 8 00:00:20,840 --> 00:00:26,360 Speaker 2: a new bank climbed to one point seventy five billion dollars. Now, 9 00:00:26,400 --> 00:00:28,960 Speaker 2: that is the highest amount that the most amount of 10 00:00:28,960 --> 00:00:31,880 Speaker 2: money since at least twenty seventeen, when the Reserve banks 11 00:00:31,880 --> 00:00:34,960 Speaker 2: started publishing the data. You know, if you slice and 12 00:00:35,000 --> 00:00:37,519 Speaker 2: dicee the numbers in another way, look at it proportionately 13 00:00:37,640 --> 00:00:41,120 Speaker 2: to the amount of mortgage lending done in July, it 14 00:00:41,240 --> 00:00:45,400 Speaker 2: was also at a record high since at least twenty seventeen. 15 00:00:45,640 --> 00:00:47,479 Speaker 2: So people are shopping around. 16 00:00:47,280 --> 00:00:49,879 Speaker 1: Right, and we're talking about just the mortgages. Or when 17 00:00:49,920 --> 00:00:51,600 Speaker 1: they switch and go to a different bank for a mortgage, 18 00:00:51,600 --> 00:00:53,479 Speaker 1: are they taking everything with them, the checking account, of 19 00:00:53,479 --> 00:00:54,680 Speaker 1: the savings account and everything. 20 00:00:55,160 --> 00:00:57,200 Speaker 2: Well that's a really good point. And the data that 21 00:00:57,960 --> 00:01:00,440 Speaker 2: I've been looking at doesn't show that that just except 22 00:01:00,480 --> 00:01:04,080 Speaker 2: the mortgage lending. So I mean, it's quite an interesting 23 00:01:04,120 --> 00:01:06,280 Speaker 2: finding at the moment because you know, there's been so 24 00:01:06,360 --> 00:01:08,760 Speaker 2: much focus on competition in the banking sector, with the 25 00:01:08,800 --> 00:01:13,000 Speaker 2: Commuce Commission coming out saying there isn't enough competition. I 26 00:01:13,000 --> 00:01:16,080 Speaker 2: think that what the Commust Commissions saying is obviously still 27 00:01:16,200 --> 00:01:18,800 Speaker 2: very valid. But the thing is is that there are 28 00:01:18,840 --> 00:01:23,320 Speaker 2: factors in the current market that are causing this level 29 00:01:23,319 --> 00:01:26,000 Speaker 2: of switching. So you know, it's probably fair to say 30 00:01:26,240 --> 00:01:29,560 Speaker 2: there could still be more competition, but currently there are 31 00:01:29,560 --> 00:01:31,200 Speaker 2: a number of things happening that are pushing people to 32 00:01:31,440 --> 00:01:33,600 Speaker 2: bank cop like this. 33 00:01:33,920 --> 00:01:36,360 Speaker 1: Does this kind of undermine the case for open banking? 34 00:01:38,040 --> 00:01:39,920 Speaker 2: Look, I don't think so. I think that all the 35 00:01:41,800 --> 00:01:47,720 Speaker 2: Commuce Commission's recommendations should still be considered seriously. But I mean, 36 00:01:48,800 --> 00:01:51,480 Speaker 2: I'll just talk through some of the factors behind this 37 00:01:52,040 --> 00:01:55,720 Speaker 2: bank copying. So obviously, at the moment, people simply don't 38 00:01:55,760 --> 00:01:58,560 Speaker 2: want to buy houses. Demand for mortgages is very low 39 00:01:58,600 --> 00:02:01,280 Speaker 2: because interest rates are high and people are worried about 40 00:02:01,320 --> 00:02:03,480 Speaker 2: losing their jobs, and you know, there's a recession and 41 00:02:03,520 --> 00:02:08,359 Speaker 2: so on. So banks have been offering quite attractive cash 42 00:02:08,400 --> 00:02:11,200 Speaker 2: deals for people who join the bank and take out 43 00:02:11,200 --> 00:02:15,840 Speaker 2: a mortgage that has been causing people to switch. The 44 00:02:15,919 --> 00:02:18,760 Speaker 2: other thing is that recently people have been fixing their 45 00:02:19,400 --> 00:02:23,120 Speaker 2: mortgages at quite short durations because they've been betting on 46 00:02:23,200 --> 00:02:27,000 Speaker 2: interest rates falling soon. So if you fix most of 47 00:02:27,040 --> 00:02:29,040 Speaker 2: your mortgage at a short duration and it comes up 48 00:02:29,040 --> 00:02:31,680 Speaker 2: for renewal and your whole mortgage, you know you need 49 00:02:31,720 --> 00:02:34,760 Speaker 2: to refix. It's easier at that point to change bank 50 00:02:35,040 --> 00:02:37,560 Speaker 2: than if you fix some for six months and some 51 00:02:37,639 --> 00:02:39,600 Speaker 2: for four years, you know, because you can't shift some 52 00:02:39,639 --> 00:02:41,520 Speaker 2: of your mortgage to a bank and keep some of 53 00:02:41,520 --> 00:02:44,120 Speaker 2: your mortgage at your old bank. So because of the 54 00:02:44,160 --> 00:02:47,399 Speaker 2: way people have been fixing it short durations, it's made 55 00:02:47,440 --> 00:02:51,000 Speaker 2: it easier for them to change. And you know, as 56 00:02:51,040 --> 00:02:54,440 Speaker 2: I said before, banks are competing because business is down. 57 00:02:55,480 --> 00:02:56,680 Speaker 1: It's good to talk to you man. Thank you so 58 00:02:56,720 --> 00:02:58,480 Speaker 1: much for running us through that. It's genative training. The 59 00:02:58,480 --> 00:03:02,800 Speaker 1: herold's Wellington Business editor. For more from Hither Duplessy Allen Drive, 60 00:03:02,960 --> 00:03:06,359 Speaker 1: listen live to News Talk SETB from four pm weekdays, 61 00:03:06,480 --> 00:03:08,680 Speaker 1: or follow the podcast on iHeartRadio.