One of the few non-banks still approving low-equity home loans is tightening its lending practices after being flooded with applications.
Australian-owned Resimac, which started in new Zealand a year ago, is one of the largest non-bank lenders.
It had a major surge in business several weeks before the Reserve Bank introduced on October 1 rules limiting the amount of high loan-to-value ratio (LVR) lending that banks can do.
Non-bank lenders are not covered by the restrictions, and any move to rein them in would require a change to the law.
Resimac New Zealand mortgages general manager Adrienne Church said many applications had come in recently.
"The brokers haven't had anywhere to go, so they've all been knocking on our door," she said.
"While we can continue to write at 90 per cent [LVR], we can't have a whole portfolio at 90 per cent."
Resimac is introducing a range of changes to make sure its lending remains viable in the long run.
Church said loyal brokers would be prioritised over newcomers, as would those that brought in other business besides high LVR loans.
"The Johnny-come-latelies ... can still get access to our over 80 per cent [LVR loans], but that'll be through giving us their under 80 per cent [LVR loans]," she said.
Resimac offers standard loan products in lower LVR ranges, as well as "low-doc" loans for self-employed borrowers.
It has bumped up its low-equity premiums to 0.50 per cent for 80 to 85 per cent LVR loans, and 0.90 per cent for those borrowing 85 to 90 per cent.
Any fees will be added to the loan balance before working out which bracket people fall into, and 90 per cent will become the upper limit for lending.
Brokers who submit a "fully packaged" deal that helps to improve Resimac's turnaround times will receive a $250 bonus when the loan settles.
Other Australian non-bank lenders are rumoured to be sniffing around the new market being opened up by the Reserve Bank's rules.
Bluestone has confirmed it is considering re-entering New Zealand, while Pepper says it has no immediate plans to cross the Tasman.
Meanwhile, a 20 per cent stake in Resimac's home loan business will be sold back to its parent company by the NZX-listed NZF Group.
- © Fairfax NZ News