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Independent economist, Tony Alexander, and collaborate to run a monthly survey of mortgage advisors around the country. Here’s a summary of the results in September 2021.



  • Banks seem to be just as willing to lend this month, but they’re paying a lot more attention to the finances of people applying for low deposit loans or mortgages to build a new home off the plans
  • Covid-19 lockdowns have reduced mortgage enquiries from investors and first home buyers, but not by as much this time
  • Preference for three-year fixed mortgages has reduced slightly in favour of the two-year rate, but the three-year rate is still the most popular by far
  • Demand for five and one-year rates is almost non-existent

This lockdown’s having less impact on first home buyer interest

Fewer first home buyers were seeking mortgage advice this month, but the decline was much less than when Auckland locked down in August last year. That’s probably because people now know the housing market takes off again when lockdowns end.

Investor demand continues to decline

Investor enquiries have reduced substantially, returning to the low levels seen in May. Clearly, investor demand for mortgages is continuing to decline following the tax and loan-to-value changes announced earlier this year.

Refinancing is still increasing, but to a lesser degree

Refinancing can be caused by people changing their fixed rate term and/or changing lenders. Mortgage advisors continued to see increasing interest in refinancing this month. However, the growth has steadily declined since a sudden peak in June following strong expectations of future rate rises. It’s now at the average growth rate seen since June 2020. The delay of a widely expected August rate rise from the Reserve Bank may also have reduced immediate demand for refinancing.

Willingness to lend is unchanged and still low

Due to the nationwide lockdown, the government delayed new, tighter lending criteria to give people time to prepare. However banks continue to show low levels of willingness to provide home loans. When it comes to low deposit mortgages, they’re already examining borrower income and expenses to the level required by the new responsible lending criteria. This time the lockdown has not caused a dip in willingness to lend; it has simply remained low. Experience has shown that while hospitality and construction are strongly impacted, the economy and housing market will recover strongly.

Three years is still the most popular fixed rate term

In 2020, the one-year fixed interest rate term was by far the most popular. Two and three-year rates then found increasing favour. Since June, however, the three year rate has continued to grow in popularity reaching 69% in August and dipping slightly to 57% this month.  One and five-year rates are now being chosen by only a small portion of borrowers.


Regional observations

Here’s a selection of the general comments made by mortgage advisors who responded to the monthly survey questions.


  • The market for non-bank lenders is growing as the banks tighten lending criteria
  • Most investors are waiting to see what the impact of the new lending rules will be
  • Investors who are active seem comfortable with a 40% deposit requirement, although some are only looking for new builds due to their 20% deposit
  • Sellers’ price expectations remain high, but they’re waiting until after lockdown before listing
  • More and more new builds are being bought off the plans with completion 12 to 24 months away
  • Banks are still slow to process applications, but it has improved – probably due to the low volume during lockdown
  • Interest rate negotiations with banks are slow; once offered, the rate may only be valid for a very short time
  • Lockdown and working from home are further motivating first home buyers who are able to meet the house price increases
  • There is some general nervousness around interest rates
  • An increasing number of people are relocating to Christchurch for better prices and housing quality

Bay of Plenty

  • More people want bridging finance, so they can bid at auctions without selling and eliminate the risk of having nowhere to live, but lenders are increasing the qualifying criteria
  • Building costs and council development contributions are increasing and causing funding issues for some buyers
  • There is some concern about how fast interest rates will rise, coupled with borrowers choosing shorter term rates just for affordability, even though rates are very low
  • More properties seem to be available for first home buyers
  • Tauranga housing supply is being further stretched by strong demand from Aucklanders who want to move; some are buying houses unseen for very high prices


  • In general, banks are making it more difficult to borrow, to the point where one bank almost seems to be avoiding lending

Hawke’s Bay

  • The housing market is still busy and there’s been a clear increase in first home buyer enquiries in last few weeks
  • Applications for home improvement loans have increased
  • New regulations mean banks are tightening both their lending criteria and their focus on borrowers’ expenses
  • Non-bank lending is increasing


  • There’s good interest from first home buyers, but not many are qualifying for lending due to slight declines in their financial situations and increasing bank restrictions


  • More people are undertaking substantial renovations, because they don’t think purchase offers that are subject to selling their own home will be accepted
  • Despite a lack of listings, more first home buyers are now including prudent conditions in offers, such as subject to builders report or finance, even if it means they miss out
  • First home buyer incomes and deposits have not increased with prices, so most are now priced out of the market
  • When it comes to assessing income from investment properties, so far only one bank is differentiating between existing properties and new builds, which are expected to be exempt from new tax rules
  • Significant delays in housing developments could mean approved lending applications expire and have to be reassessed under new criteria
  • The longstanding sellers’ market in Wairarapa may be easing slightly as real estate agents seem more collaborative and more buyers are having offers accepted


  • There’s been a significant drop in the number of homes for sale and many buyers are left hoping that spring will see more listings


  • Some investors are rushing to buy into turn-key townhouse developments without fully understanding the potential risks, such as no guarantee of lending approval, delayed settlement and possible price increases
  • Live lending applications, not just pre-approvals, are typically taking eight working days to be processed as banks seem understaffed
  • Strong borrowers are getting good finance offers, but it can be a challenge for people with existing consumer finance, an irregular saving record or a less-than-perfect bank account history
  • Many first home buyers are struggling to keep up with price increases, competition and increasingly stringent bank criteria, so they’re withdrawing from the market
  • Some buyers feel the market may have peaked and they risk paying too much, and this lockdown has raised thoughts of more occurring, so they’re just waiting to see what the next few months will bring

Queenstown Lakes

  • The shortage of homes and land continues, and some unusually high selling prices are raising sellers’ expectations even further
  • More than ever, buyers need an experienced advisor to help them gain unconditional lending approval and a strong negotiating position


To learn more

Visit to read or download the free full survey report including graphs.