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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

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
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 4.29 5.09 5.35
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 5.14 ▼5.79 6.15
TSB Special 4.79 4.34 ▼4.99 5.35
Unity 5.65 4.80 5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 19 May 2022 10:42am

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