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Core Finance relaxes lending criteria

Second mortgage specialist Core Finance has relaxed its lending criteria in response to a cooling Auckland property market.

Monday, April 16th 2018, 3:06PM

by Dan Dunkley

The non-bank lender will lend up to 75% of the loan to value ratio of a second home, minus first mortgage debt. Previously, the lender had provided loans up to a 70% LVR.

Core Finance said it had taken the decision after seeing some of the heat come out of the Auckland property market. Grant Donoghue, director at Core Finance, said: "A year or so ago, values rocketed and people got excited because they had equity they could borrow off. We decided the numbers weren't real, and pulled back to 70% until things calmed down. Things have been stable for a little while now, so we have decided to move back to 75% LVR."

Donoghue added: "The key with us is that we are doing big loans. Our competitors are capped at $50,000 or $100,000, but we could go up to $1m if we wanted to." Donoghue added Core Finance would now consider lending against homes in need of renovations and improvements.

Donoghue believes a pull-back from the major banks, and the government's decision to extend the bright line test from two to five years, have contributed to the slowing market: "It is certainly taking longer to sell and investors are taking a wait and see approach. It has all played a part in cooling the market. We feel the time is right to go to 75%, especially in the main centres, Auckland, Wellington and Tauranga, where there is less risk."

Donoghue believes non-bank lenders will continue to take business from banks as major lenders retain a conservative outlook: "Two years ago banks were writing a lot of business, now they are looking for excuses and finding them everywhere. The second mortgage market is getting busier, because people are having to look elsewhere."

 

Tags: Lending LVR

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
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 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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