BNZ and Kiwibank gain mortgage market share while ASB and ANZ lose ground

New Zealand’s home loan market passed $400 billion for the first time in June, and the figures behind that milestone show the banks are no longer sharing the growth evenly.

Reserve Bank data from its quarterly Bank Financial Strength Dashboard, analysed on Friday by interest.co.nz publisher David Chaston, shows BNZ and Kiwibank are writing considerably more new mortgage business than the size of their books would suggest, while ASB, ANZ and Westpac are all writing less.

The method is straightforward. Take the change in each bank’s mortgage book from one quarter to the next, treat that as new business, and compare each bank’s slice of it against the slice of the total market it already holds. A bank winning more of the new lending than its existing share is gaining ground. One winning less is going backwards, even if its book is still growing.

On that basis BNZ won 27.7 per cent of new business in the June quarter, far ahead of the 16.9 per cent of the total mortgage book it carries, and the largest share of any bank. Kiwibank won 10.4 per cent against a book share of 8 per cent. The smaller banks and non-bank lenders grouped together as all others took 8 per cent of the quarter’s growth on a 6.5 per cent share of the market.

The three biggest names all went the other way. ANZ won 26 per cent of new business against an embedded share of 29.3 per cent. Westpac won 15.6 per cent on a book share of 18.4 per cent. ASB was furthest behind, winning just 12.2 per cent of the new lending while holding 21 per cent of every home loan on the country’s books.

ANZ’s decline is the longest running of them. When the Dashboard data first became available in March 2018 the bank was writing about 40 per cent of all new business. Setting aside the pandemic years, that has fallen to a shade over 26 per cent, which helps explain why ANZ has been prepared to push its margins down to win borrowers back.

None of this happens quickly. Chaston notes that “overall market share shifts have been glacial”, and the June quarter numbers do not rewrite the pecking order in one hit. Over enough quarters, though, they move it. “Overall, despite the apparent rigid market share base, it is possible to make gains, and it is clearly possible to lose market share,” he wrote.

What has changed is how willing borrowers are to move. Reserve Bank figures show $28.5 billion of home loans switched between banks in the past year, a switching rate of 7.5 per cent, or about one borrower in 13. That is still low, but it was 6 per cent in the year to June 2025 and 4.1 per cent the year before that. The hassle of shifting has come down and more people are shifting. “Borrower activity shifting for a better deal is rising too, so the pendulum is starting to swing in favour of consumers,” Chaston wrote.

That matters more than it used to, because the pool the banks are fighting over is filling more slowly. Total lending for housing took ten and a half years to climb from $100 billion to $200 billion. The next $100 billion took five and three quarter years. The most recent $100 billion took five and a half. The pace has flattened out rather than accelerated, so a bank that wants a bigger book increasingly has to take it off a rival rather than wait for the market to hand it over.

The most recent monthly figures show why the pressure is on. New mortgage commitments fell to $7.9 billion in July, the lowest monthly total since February, down 7 per cent on June and down 13.1 per cent on July last year. The number of new commitments dropped to 21,268, down 7.2 per cent in a year, and the average new loan slipped to $369,256, some 6.3 per cent smaller than a year earlier.

Investors are the ones stepping back. Their share of new commitments fell to 18.9 per cent in July, down 2.3 percentage points on a year ago and the steepest fall of any borrower group. Owner-occupiers who are not buying their first home still take the bulk of the lending at 59.6 per cent. First home buyers were the only group to gain, lifting to 20.1 per cent from 19 per cent in June.

Rates are the reason a lot of borrowers are sitting still. The Reserve Bank said in its May Monetary Policy Statement that the average interest rate paid across all outstanding mortgages had fallen to 4.9 per cent in March, but was expected to climb to about 5.3 per cent over the following year as people refix. Borrowers who locked in low rates during the cheap money years are rolling onto dearer ones, which tends to make the size of a new loan, rather than the appetite for one, the binding constraint.

The Reserve Bank is not worried about the picture. In its annual review of macroprudential settings on 14 August it left loan to value restrictions where they are, allowing banks to write up to 25 per cent of new owner-occupier lending above an 80 per cent loan to value ratio and up to 10 per cent of new investor lending above 70 per cent. “Housing risks are currently contained. Nationally, house prices have remained broadly flat in recent years, while mortgage lending growth has been modest and the share of higher-risk lending remains manageable,” Assistant Governor Financial Stability Angus McGregor said.

Contained is not the same as comfortable, at least for the banks. A slower growing market, more borrowers prepared to walk, and three of the five biggest lenders losing share of the new business adds up to a competitive squeeze, and it is showing in the results. Chaston links the market share fight directly to what the banks have been reporting, writing that it may be why we are seeing banks reporting lower profits, lower net interest margins, and bank bosses complaining about uncommercial offers.

For anyone with a mortgage, that is the useful part. When the lenders are scrapping this hard over a pool that is barely growing, the leverage sits with the borrower who is willing to ask another bank what it would do. One in 13 is doing exactly that. Not long ago it was one in 25.

Have you switched banks for a better mortgage rate, or asked your own bank to match an offer and got somewhere? Tell us how it went in the comments below.

This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂