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Struggling to secure finance?

Think beyond the bank.

Tuesday, September 8th 2020, 5:06PM

Why more property investors are choosing Select
While the Reserve Bank has loosened LVR restrictions in response to the COVID-19 crisis, for most property investors it feels like nothing has changed.

Theoretically, banks can now finance up to 80% on a rental property, up from 70% or even 60% in some cases. However, current market uncertainties mean banks are, by and large, sticking to the previous credit criteria.

If you’re keen to expand your portfolio or invest in upgrading your existing stock, you may struggle to get the finance you need. For example, if your interest-only term is due to expire, you may find the banks reluctant to roll it over. In some cases that can mean thousands of dollars extra a month in repayments. For these investors – and those unable to finance upgrades required under the healthy homes standards – selling seems to be the only option.

It’s why savvy investors are looking for smarter solutions beyond traditional lenders. Home loan specialists like Select are structured to offer far more flexibility and more sustainable options – here we look at why.

We take the time to understand you
We make it our business to offer a broad variety of loan options that suit diverse applicants. Our funding structure means we are able to offer more flexible terms than a bank can, and without automatic credit scoring, we take the time to look at the specifics of each deal. If your situation is a bit out of the norm,  like being self-employed, having impaired credit or complicated income streams, it doesn’t mean you’re an instant, ‘no’. We can look carefully at your full situation, and often accommodate deals that won’t fit into a bank’s tick-box of requirements.

You may access better terms
Over the March/April lockdowns, one survey found that more than a third of Kiwi households were suffering from financial hardship. For small businesses, year-on-year revenue fell by 39% over April, according to Xero.

It’s understandable, then, that banks would turn their attention to maintaining their stressed portfolio, rather than significantly growing their loan book. This means banks will have a lower appetite for increasing an existing borrower’s capacity.

Even if you can access funds from a mainstream bank, you may get better terms from a lender like Select, because we’re still focussed on new lending. If you’re looking for sought-after loan features like interest-only terms up to 5 years, higher LVR tiers, and the ability to grow your portfolio without cross-securitisation, Select might be able to offer you a solution.

Interest rates could be lower than you think
Banks are often perceived as offering significantly lower interest rates than other lenders. Case by case, that’s not always true. If you’re considered high-risk by the banks, you may find your terms are much easier and rates lower with Select, because we can take a far more nuanced view of your financial situation. Even in typical cases, many investors are surprised at how slight the difference is between bank rates and ours.

Get faster turnaround
At Select, we’ve been able to design systems and processes from scratch. This delivers the best experience for our customers while allowing for the strictest of scrutiny. That means less hassle for you and less time waiting for approval. With finance coming through when you need it, you’ll be able to jump on great deals or start renovations when it suits you.

Banks aren’t the only option
If you’re a property investor facing the lending restrictions at your current bank, why not try a lender like Select? With a more nuanced view of your situation, you could get a ‘yes’, where your bank has said ‘no’. Our nimble processes will deliver you an answer faster and you may even be pleasantly surprised at the competitive interest rate.

Get those renovations done so your rental meets the healthy homes standards or secure the next great property deal with finance from Select. Contact your advisor about accessing the finance you need with Select or visit www.selecthome.co.nz/investors.

The information provided in this article is general in nature and should not be taken as constituting professional or financial advice. Lending criteria, terms & conditions, fees and charges apply.

Tags: Bluestone Select Home Loans

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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 4.95 - - -
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 2.95 3.45 -
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 ▼2.45 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 3.35 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 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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