Basecorp launched its Long Term Prime product over the past month, aimed at high-quality borrowers. The product will charge interest rates of between 6.45% to 7.25%.
The Prime offering is an alternative to the lender’s revamped Long Term Standard product, which still will charge interest of 7.25% to 7.95% for more specialist borrowers. The company will lend up to 80% LVR across its products.
The Hamilton-based company has launched the new offerings as it tries to take a slice of market share given up by the big banks, which have tightened credit conditions over the past 18 months in the face of regulatory pressure.
John Moody, head of funding and prime lending at Basecorp, said the company was “trying to reach a new category of borrower” that had grown because of the banks’ behaviour. He said banks were “slow” in the current market, and in many cases, “not meeting customer needs” due to their tightened criteria and servicing requirements.
He added: “There’s an opportunity, between rates on offer from banks and non-bank lenders, for us to capture a portion of that market.”
It comes as the latest Reserve Bank data shows non-bank lenders taking an increasingly large slice of the New Zealand market. Non-banks lent $2.6 billion in the year to August, according to figures from the central bank.
Basecorp’s Prime product will lend between $50,000 up to $1 million, and more than $1 million in exceptional cases. It offers P&I or interest-only up to 3 years on fortnightly or monthly payments, and 3-30 year terms, according to marketing materials.
Basecorp has rolled out the Prime product with select advisers. A nationwide rollout is set to follow. Moody said Basecorp has secured extra financing from its commercial banking partners to fund the new product.
Moody added: “The early feedback is that we’re a bit easier to deal with, as advisers have a direct line with our decision makers. There’s plenty of opportunity for non-banks generally, and we have a full spectrum of products, from long-term to short-term & bridging, development and construction.”