Overseas expansion and name change

Self-styled as the financial paramedic, Royle has operated under his iLender brand for 20 years and is now changing to Expat Kiwi Mortgages, aiming the business at the 700,000 plus New Zealanders living overseas who might want to buy or refinance property in New Zealand.

His extensive research shows there is no other website dedicated to serving expat Kiwis wanting mortgages in New Zealand.

British-born and bred Royle, who has operated in New Zealand for 20 years is now splitting his time between Auckland and London, where most of his children live.   

Since his expanded iLender website (which will be under its new name in about a week) went live a month ago he has had four inquiries as well as one unconditional offer and one conditional offer issued so far. 

Royle has seen a noticeable increase in expats wanting to buy property in New Zealand, particularly since COVID. Having a major effect over the past 18 months have been falling interest rates, banks’ declining test rates and falling house prices.

“Post-COVID there was a lot of uncertainty and while people were not ready to come back home, they still wanted property in a safe haven. It’s been a case of many people thinking now is the right time to buy a bolt hole.

“Interest rates have also been a major factor and hopefully we will see another two OCR cuts before they bottom out.

“Banks’ test rates dropping from 9% plus to about 7% means people can borrow 20% more than they could two years ago, which has made a massive difference.

“And a nationwide 13% drop in house prices has also been good for expats taking out mortgages.”

Punching above

Royle says his North Shore office has done plenty of mortgages for expats over the years and has six running now. “I thought why not set up a dedicated website under our banner. I am also a big believer in punching above your weight.

“From the outside it looks like we are a multinational business with toll free numbers in London, Australia and New Zealand, but all mortgage business is handled in his North Shore office, even if he is in London and dealing with an expat in New York or Dubai.

The expanded business uses New Zealand-based lenders only.

Although the major New Zealand banks are Australian owned, he says over the years expats have had difficulty getting home loans through them because of the way some scale or calculate overseas income.

He recently handled a third house purchase for an expat – the highly paid head of a major bank in Switzerland with major family expenses. He already had two New Zealand mortgage-free rental properties, and the new mortgage was more than serviced by the rental income from three properties.

The expat had banked with ANZ for 20 years and Royle says he was told he couldn’t afford the new mortgage because it took his servicing based on his overseas income, which was scaled back and wouldn’t accept the servicing based just on his New Zealand rental income. “It was nonsense because it was 20% loan to value spread across two properties.

“I took the application to another traditional bank and it was approved immediately.”

Royle says when a bank is using only 56% of an expat’s income to pop into its mortgage calculator, it is immediately an “epic fail”.

“Most banks, bar one, scale a bit. I've had so many interesting conversations over the years with all of them saying it just makes no sense as they can only lend 70% under the LVR rules anyway, so there's no risk.

“One bank did listen and if an expat is in Australia they go dollar for dollar and if the expat is in London they will use their gross income and scale that by only 20%. Whereas ANZ, for example, will take an expat’s London net income and scale it by 20% which makes a big difference.”

Royle says his business is not limited to New Zealand expats. In the past year he has done 10 deals for Australians buying Queenstown property in the $2-4 million range. “They can buy here without restriction, but some of the banks can be churlish and say they need a link with New Zealand, which is rubbish.”

“Fortunately, non-banks are not as hide-bound and we have used them quite often to get deals done.”

He says his business has never had an expat loan go bad.