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Banks Strategize To Get Customers To Take Up Low Or No-Interest Loans As Mortgage Lending Drops

Banks in New Zealand are mapping up strategies to get customers following the drop in mortgages.

The banks are now contending for customers to take up low or no-interest loans to make their homes warmer, it is in the wake of many New Zealanders deciding to go solar.

According to Reserve Bank data, there was around $6 billion in new residential mortgage lending in June, compared to $8 billion at the same time in 2021.

Per the data, the decline comes for both first home buyers and other owner-occupiers. As the Reserve Bank seeks to curb inflation, it will be a piece of welcome news for them but the other side of it is that it will force banks to seek new ways to lure customers.

Looking at the amount spent on electricity, Auckland homeowner Peter Clarkson thinks the loans for home heating improvements are a great opportunity to switch to solar energy.

“[It’s] a really good investment, to encourage people to get solar, electric is just going up and up and that’s made it more affordable for the normal person,” he said.

Westpac is offering 0% interest as their ‘Warm-Up’ loan is being extended.

The Chief Executive of Westpac, Cathrine McGrath assumed the extension will help New Zealanders to save money and improve their homes.

“That’s $40000 so you can do great things to make your home drier and warmer and it also helps the environment.

“It’s really sensible lending about home improvements, it reduces the cost of builds, it’s helping to make homes warmer, and in the process, it’s better Aotearoa because we’re relying less on traditional forms of heating and energy,” McGrath stated.

ANZ and KiwiBank have also made available sustainable loans.

Andrew Eagles from the Green Building Council wants New Zealanders to utilize these loans to make their homes warmer.

He said: “30 to 40% of Kiwi homes are damp and mouldy, the more options there are the better, we’d love to see more Kiwis insulating those homes, making them warm for their whānau.

“With every one dollar put into insulation in homes the New Zealand health system wins by $5.”

Currently, the demand for solar panels has shot up as the need for traditional sources of energy drops; it’s on the heels of many people choosing to make their homes warmer the green way.

Guy Coleman of Harrisons asserted that the amount of people working from home has caused these demands.

“People working from home and using home power, not the businesses power, so they’ve got the power bill and gone ‘we need to do something about this’ and so that sparked a lot of people getting in touch with us,” Coleman said.

As of now, homes and buildings make up 20% of New Zealand’s greenhouse emissions. However, calls have been made for these offers to go further.

“What we see in a lot of Europe is these offers supplemented by a government grant, because it makes it far more accessible for Kiwi whānau,” Eagles stated.

Coleman added: “love to see some moves being made by the government as well”.

Mortgage Lending

Kofi Oppong Kyekyeku

I am a Ghanaian Broadcast Journalist/Writer who has an interest in General News, Sports, Entertainment, Health, Lifestyle and many more.

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