Reserve Bank Figures Reveal Mortgage Holders Still Benefit from Lower Interest Rates

The Reserve Bank of New Zealand has released figures showing that mortgage holders are still benefiting from lower interest rates, despite recent increases. In the June quarter, borrowers paid $4.783 billion in interest on $397.4 billion in residential mortgages outstanding.

This represents a 12% decrease in interest payments compared to the same time last year, when interest was paid at $5.375 billion on $392.6 billion in mortgages. The total amount owed by mortgage holders increased by 1.2%, from $392.6 billion in the first quarter.

New mortgage lending saw a significant increase of 6.4% to $27.3 billion, and net credit growth was $4.9 billion, down 4.2% from the previous quarter. Additionally, borrowers made extra payments totaling $4.760 billion to create a buffer against rising interest rates.

The Reserve Bank's figures also show that low equity lending increased to 10%, up from 9.6% in the first quarter, and interest-only repayments rose to 4.7%. However, principal and interest repayments remain at 84% of total outstanding mortgage debt.