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Non-banks see surge in demand

Non-bank lenders have noted a sharp increase in demand for home loan products as banks maintain tight restrictions during the Covid-19 outbreak. 

Wednesday, April 29th 2020, 8:39AM

Luke Jackson, Resimac

Second tier lenders say home loan customers are searching for alternatives as banks avoid taking on new borrowers or re-financings during the global pandemic.

It comes as non-banks reduce their interest rates closer in line with traditional banks. Non-banks see an opportunity to take further market share in the current crisis. 

Resimac claims a 30% increase in enquiry levels since Easter.

Resimac head of New Zealand Luke Jackson said banks were focused on processing hardship requests and had reneged on customer pre-approvals. 

"We are hearing from our mortgage adviser network that banks are not focussing on new business and are preoccupied with processing Covid-19 hardship applications. As a result more borrowers and advisers are turning to non-banks," he said in a statement. 

Jackson believes non-banks, with ever-lower rates, are becoming "a true alternative to trading banks". 

Aaron Milburn, head of New Zealand at Pepper Money, said enquiries held up well in the first weeks of the lockdown, before they slowed in line with market conditions. He told TMM Online that the firm has noted an increase in demand since the lifting of level four restrictions, and they "expect that to continue".

Milburn added: "An interesting change we noted during the lockdown was that customers seeking solutions engaged directly with us, which we referred on to accredited advisers in their local area."

Stephen Massey, head of sales at Avanti, also noted a "very steady" period of demand through the level four lockdown.

Massey added: "Avanti has been pleased with the positive support and desire of advisers to assist both new and existing customers during this period. Our team have remained very busy while working from home and we are hopeful of further market demand now as we enter level three. It seems evident that there will be strong demand for the non-bank sector and advisers to help more NZ families in the coming months."

Meanwhile, peer-to-peer lenders, including Southern Cross Partners, have also noted an uptick in in-bound enquiries in recent weeks, as borrowers seek non-traditional financing. 

The Covid-crisis could accelerate the trend towards non-bank lenders. According to advisory firm KPMG, non-banks recorded a 9.32% increase in gross lending last year.

 

 

Tags: Avanti Lending non-bank lenders Pepper Money RESIMAC Southern Cross Southern Cross Partners

« NZFSG CEO's predictions for a post-Covid-19 marketLending strong – before lockdown »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 ▼3.85 ▼3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 ▼2.93 ▼3.07 ▼3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.45 2.99 3.35
SBS Bank 4.54 ▼3.05 3.19 ▼3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼2.55 2.69 ▼2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 ▼2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 ▼3.29
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.05 3.13 3.12

Last updated: 11 August 2020 8:24am

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