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Home loan complaints against banks rise

Complaints against banks by home loan borrowers rose by 12.3% last year amid a rising number of declined applications, according to the Banking Ombudsman Scheme. [READ ON]

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High-risk borrowers running into problems

Borrowers who have missed payments or who are considered high risk for other reasons are increasingly likely to be turned away if they try to refinance with new lenders.

Monday, October 6th 2008, 5:05AM

by Maria Scott

It is barely a year ago that lenders were competing to attract borrowers with blemished credit histories, small deposits or unproven incomes. But the credit crunch has dramatically reduced choice as lenders have withdrawn, retrenched and tightened criteria.

Mortgage broker Darren Pratley, of Auckland Home Loans and chairman of the New Zealand Mortgage Brokers Association says that lenders’ criteria have changed so much that some borrowers will have no option but to stay with their current lenders when they need to refinance.

Any missed payments could certainly jeopardise a borrower’s ability to move. “Lenders aren’t prepared to take on another lender’s problems.”

Louise Ledger, director of non-bank lender Global Home Loans confirms that “the appetite for anyone with a credit issue has really shrunk”.

Laura Gregory, general manager of Freedom Mortgages (formerly Resi Mortgage Corporation) says it is “definitely a lot harder than it was six months ago” for borrowers to switch lenders if they had experienced payment problems.

William Cairns of non-bank lender General Finance says that many who easily qualified for a mortgage two years ago, would not get one today.

If a borrower gets a loan approval and it is not quite what he or she wanted they may have to accept it, as it is likely to be the only one they get.

For lenders who remain in the higher-risk end of the market, the conditions may help them to retain borrowers who might otherwise have jumped ship if they had a choice of rate or terms. But this is likely to be small comfort when overall demand for loans is down and where one of the main funders of loans for non-banks, GE, has withdrawn all fixed rates. Borrowers with strong credit ratings may be able to switch to mainstream banks if they want a fixed rate.

« Sovereign axes lo-doc lendingOCR cut to 7.5% »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 4.09 4.49
ANZ Special - 3.65 3.59 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.54 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 3.99
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 3.59 3.99
Median 5.35 4.15 4.09 4.19

Last updated: 16 September 2019 10:03am

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