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Squirrel innovates with construction loans

Mortgage adviser group Squirrel has launched an innovative product to help first home buyers get on the property ladder.

Wednesday, December 12th 2018, 6:28AM

Peter Norris

The adviser group has rolled out Squirrel HomeBuild, a new home loan product aimed at owner-occupiers partnering with builders.

HomeBuild gives builders progress payments to complete construction, but buyers do not have to make payments until the home is finished. The bridge financing provides builders with easier financing, while giving buyers breathing room to pay rent and other costs while they get ready to move into their home.

Under HomeBuild, interest is capitalised and once the home is ready, buyers pay land cost, building cost, and interest in their loan repayments.

Squirrel launched the product last Tuesday, and the firm is working with two lenders. Squirrel's Peter Norris said he expects to see more innovative financing structures in the market, as first home buyers and owner-occupiers grapple with rising prices. 

"I think this is the way the market is moving," Norris said. "We are trying to fill a need to get more people into homes."

Norris added: "As a brand, Squirrel is growing, and we are dealing with bigger builders. We are seeing what the pain points are for the builders, having to fund the build. This creates cashflow issues. With our product builders do not have those cash flow problems. This is a great story for buyers as well, coupled with KiwiBuild, and various construction projects around the country, particularly in Auckland."

Norris expects more buyers to head down the new-build route. HomeBuild allows borrowers to take up to 95% LVR, as new properties are not bound by LVR restrictions. Norris added: "Construction is at a good level at the moment, and we are seeing first home buyers turn to KiwiBuild and building in general."

Squirrel's new product comes as lenders launch new products to cater for FHBs. BNZ this week launched a shared equity scheme, which will see finance companies partner up with buyers to fund deposits. The scheme is akin to similar models in Europe, and are viewed to be a long term solution to easing the housing shortage crisis and low home ownership levels.

 

 

 

 

 

 

Tags: BNZ LVR Squirrel

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 ▲3.15 ▲3.55 ▼3.75
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.55 ▲2.95 ▼3.15
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.29 2.69 2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

Last updated: 5 August 2021 9:02am

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