Kiwibank is setting the pace among big banks by aggressively promoting its involvement in a fast-growing market which gives loans to borrowers who have little or no documentation of earnings.
Tuesday, August 23rd 2005, 8:30AM
by The Landlord
The bank's "low-doc" loans will give up to $500,000 to newly self-employed workers with no financial history.
Such borrowers pay between 0.5 and 1 percentage points above standard borrowing rates, which are usually available only to businesses with a two-year earnings track record.
Kiwibank chief executive Sam Knowles said the bank would aggressively promote the product, for which he saw a small, but significant market.
"Low-doc loans for the self employed and casual workers may prove only 5 per cent of total mortgage lending," said Knowles. "But that is enough for us to go after."
In what is probably the most competitive market in New Zealand, home and business mortgage lenders are constantly looking for new products to win vital market share.
Big banks usually want to see a borrower who has an earnings history or who has worked at the same job for several years.
