Those with mortgages did a record amount of bank-hopping in December, as banks offered attractive cashbacks to get new customers.

A whopping $5.8 billion of mortgage debt was shifted between banks during the month, easily surpassing the previous record of $2.6b reached in July last year, according to the Reserve Bank.

To put these numbers in context, those with mortgages owe banks in New Zealand more than $380b.

Cotality New Zealand chief property economist Kelvin Davidson said the spike in switching was notable, but unsurprising, given how much banks had been competing on cashbacks.

Indeed, they put cashbacks worth up to $30,000 on the table in late 2025.

Davidson said borrowers putting more of their loans on floating and shorter-term fixed rates last year also made it easier for them to switch banks. Borrowers can only move if they shift their entire mortgage – not just a part that is up for re-fixing.

In November, an unusually high 49.4% of new residential mortgage lending was on floating terms, suggesting more borrowers than usual may have had the ability to easily switch banks.

Davidson believed mortgage rates being near their trough in this interest rate cycle in December didn’t affect the amount of bank switching that occurred.

He doubted borrowers bothered moving based on marginally more attractive rates being offered by some banks versus others.

There was a lot of movement in interest rates in December.

Floating and shorter-term mortgage rates came down following the late-November Official Cash Rate (OCR) cut. Longer-term mortgage rates started rising in mid-December, as wholesale markets were surprised by how definitive the Reserve Bank was about its November OCR cut likely being the last in this cycle.

There is now more upward than downward pressure on mortgage rates.

Measures the Government and Reserve Bank have taken to improve competition in the banking sector were unlikely to have affected the amount of bank switching that occurred in December.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.