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Peer-to-peer a growing option, broker says

A mortgage broker who placed a client with a peer-to-peer lender after they were rejected by the bank says it is likely to become a more popular option for advisers.

Wednesday, March 2nd 2016, 6:00AM

Angela Stevens, 76, and husband Richard wanted to buy a house in Waimate but were turned down because of their age.

“I get a letter every year from the bank, telling me how valuable I am, and then they turned around and told me they wouldn’t lend me any money because I was too old,” said Angela, a retired sheep and cattle farmer.

The couple wanted to move from the West Coast to Waimate to be closer to family.

“We had a property on the coast that we thought we had sold. And then it turned to custard and the sale fell through, which left us in the position where we couldn’t finalise the purchase of the property [near Waimate],” Angela said.

They approached Hokitika mortgage broker Tony Copping late last year.

He told them about peer-to-peer lender LendMe and put them in contact with Bill Calder, LendMe’s senior manager of credit risk.

LendMe’s online platform matches borrowers wanting to borrow money with lenders willing to lend it.

Borrowers can apply for loans between $25,000 and $2 million, and lenders may fund loans in full or in increments of $1000. LendMe’s key point of difference compared to other peer-to-peer lenders is that all loans are secured against borrowers’ assets, most commonly first mortgages over property.

The Stevens made a loan application through LendMe to refinance some vendor finance of $91,000 that was left in when they bought their Waimate property.

They are now settled in their two-bedroom, straw-bale house in Waihao Downs.

Copping said equity release was another option that was considered but the rural property did not qualify.

He said peer-to-peer would become a more popular option for mortgage advisers over time, and he had two other clients considering taking the same approach.

Peer-to-peer loans  loans are exempt from the Reserve Bank's loan-to-value restrictions.

But he said it was still not designed to be a long-term strategy.   "The clients have a property to sell on the West Coast, when that sells their debt position will be negated."

LendMe pays a commission to financial advisers that had been agreed with the Mortgage Link head office.  "It's an attractive option in out arsenal of tools to meet clients' needs."

Copping said it would be important for brokers to ensure that the lending they placed with peer-to-peer providers met the responsible lending requirements of the Credit Contracts and Consumer Finance Act.

Tags: LendMe Mortgage Link mortgages Peer to Peer Lending

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 ▼6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 ▼6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼6.79 - -
Co-operative Bank - Owner Occ 8.40 ▼6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 ▼7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - ▼6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 ▼7.74 7.29 6.59
SBS Bank Special - ▼7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 ▼6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

Last updated: 17 May 2024 9:41am

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