Non-bank mortgage lending soars in 2018

Non-bank mortgage lending volumes jumped by more than $500 million last year, according to newly-released data, which underlines the growing prominence of alternative lenders.

Data from the Reserve Bank shows New Zealand non-bank mortgage lending hit $2.70 billion in December, up from $2.17 billion in January, as borrowers seek alternative mortgage financing in the face of tightening from the big banks.

Non-bank mortgage volumes are at their highest levels since April 2012, when non-banks had $2.74 billion in mortgage volumes. It comes after a year of resurgence which has seen the likes of Bluestone come back into the market and others, such as Resimac, expand their product offering for borrowers.

Non-banks account for just a slither of total mortgages in New Zealand, however. Total mortgage lending hit $258.6 billion, with registered banks making up $255 billion of that number.

Nevertheless, the figures show non-banks have made a solid comeback since the aftermath of the financial crisis, when many pulled out of New Zealand or went out of business. 

Non-banks are set to continue their charm offensive with mortgage advisers this year. Advisers are frustrated with tough servicing tests, restrictions on interest-only lending, and harsh treatment of investors with large portfolios, and have begun to view non-banks as a credible alternative.

New Zealand's biggest non-banks have joined up to raise awareness about their products, hosting road shows across the country. Nine non-banks, Avanti, Bluestone, First Mortgage Trust, Heartland, Liberty, NZCU Baywide, Resimac, Southern Cross Partners, and Spotcap, are bringing their "speed dating format" to Hamilton on February 26, and Christchurch on February 28.


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