Reserve Bank data shows mortgage top-ups accounted for 46.5% of new approvals in April, while property purchase mortgages fell to just over a third — the lowest share on record.
New Zealanders are borrowing more against existing properties and fewer are taking out mortgages to purchase new ones, according to the Reserve Bank's residential mortgage lending data for April.
The data shows 21,314 mortgages were approved in April, up 10.5% compared to the same month last year. However, the composition of that lending has shifted markedly.
The shift away from purchases
Of those approvals, just 7,719 — or 36.2% — were for the purpose of purchasing a property. That was down 2.3% year-on-year and reflects the continued softness in the residential property market.
The largest single category was top-up lending: 9,904 mortgage top-ups were approved in April, accounting for 46.5% of all new mortgage approvals. That was up 20.4% compared to the same month last year.
Top-ups are where borrowers increase the debt on an existing mortgage, typically to access equity for renovations, debt consolidation, or other purposes. The average top-up value was $102,080, with a combined total of $1.011 billion in April.
By contrast, the 7,719 mortgages approved for property purchases had an average value of $607,462, and a combined value of $4.689 billion — representing 58.7% of total mortgage approvals by value.
Banks competing for existing customers
A third notable category was switching — borrowers moving their mortgage from one bank to another. Some 2,888 approvals were switchers, with a combined value of $1.875 billion, or 23.5% of the total by value.
The high proportion of switching activity suggests competition between banks for existing mortgage customers remains intense. Banks are actively seeking to retain their loan books while the pool of new property buyers contracts.
What the numbers suggest
The data paints a picture of a market where borrowing is being driven by existing homeowners accessing equity rather than new buyers entering the market. This can reflect a range of scenarios — from renovation spending to debt consolidation — but the underlying trend is clear: fewer people are taking on mortgage debt to buy property at a time when the market is relatively quiet.
For prospective buyers, reduced purchase activity may ease competition in some areas, though mortgage availability and affordability conditions remain the dominant factors in whether someone can make a purchase work financially.
Mortgage top-ups accounted for nearly half of new mortgage approvals in April, according to analysis by Greg Ninness of the Reserve Bank data.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.