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New peer-to-peer mortgage provider licensed

New Zealand’s newest peer-to-peer mortgage lender is promising to offer mortgage brokers an easier way to get deals done for clients struggling to access funds from the banks.

Monday, November 21st 2016, 6:00AM

by Susan Edmunds

Contributory mortgage provider Southern Cross Financial is to become a peer-to-peer lender.

Chief executive Luke Jackson said the company had to make some decisions about its future ahead of the introduction of the Financial Markets Conduct Act, and had decided a peer-to-peer licence was the right way to go.

“It’s a good opportunity to modernise our processes and bring them up to modern standards," he said.

It will not be the only peer-to-peer mortgage provider in the market. LendMe also offers large peer-to-peer secured loans.

But Jackson said the Southern Cross Financial operation would be much bigger than LendMe.

Unlike other peer-to-peer platforms, which take an application from a borrower and then open the loan up to investor funding, Southern Cross Financial will prefund all loans.

Once they are drawn down, they will be on-sold to investors. Jackson said that was the only way the model would work for mortgage lending because buyers needed to know that their preapprovals were going to be funded in time.

He said financial advisers would be able to continue to work with the firm in the same way they always had.

But he said it could make things easier for some. “The banks have become a bit tougher in the last few months, our competitors are typically bank-funded finance companies and they haven’t had the liquidity they used to. We’ve got our liquidity lines to draw funds down and strong demand for people to purchase – it’s a nice way to be in this market.”

Most loans will be short-term until borrowers develop the credit history to refinance with a bank.

The minimum investment is $50,000 although Southern Cross Financial is considering reducing that to $10,000.

Tags: mortgages Peer to Peer Lending

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 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 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank ▼5.20 ▲4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▲3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.45 3.89
Sovereign 5.30 ▼3.89 ▼4.05 ▼4.39
Sovereign Special - ▼3.39 ▼3.55 ▼3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.45 3.99
Median 5.34 3.99 4.07 4.39

Last updated: 9 December 2019 9:02am

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