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A member did some research on getting NZ finance (he is o/s) to buy IP in NZ here is his response->
I just went through their website - http://kiwibank.co.nz/ - and spoke to someone who appeared to operate in their call centre.
There could be absolutely no doubt in the mind of the person from Kiwibank that I was from Australia and he was adamant about the 95% LVR. He did say that loans over 80% would need mortgage insurance though. My telephone conversation notes with him include the following:
K. will go to up to 95% (less for some areas though)
Loans can be in the name of a company or trust, but must be secured by a personal g'tee
There are no loan establishment costs for loans less than 80% LVR
If I borrowed up to NZ$300K and the LVR was 95%, then the cost of mortgage insurance is approximately $3,300
If I borrowed up to NZ$300K and the LVR was instead 90%, then the cost of mortgage insurance would reduce to just under $2K
Allow approximately 2+ weeks for the pre-approval process (particularly if you are going over 80%)
A pre-approval is good for 90 days
For loans OVER $300K but less than $400K, the maximum LVR reduces to 90%
For loans OVER $400K, the maximum LVR is 85%
If I wanted to proceed with a pre-approval, I would need to speak with someone from the 'Direct Lending Team'.
Sounds too good to be true - I may be asking the obvious but did they realise you were buying to let not to live in? I have looked on their website and it says to be eligible for Kiwibank in Reach you must
# Buy the house to live in yourself
# Not own another home
Not sure if they have another 95% product apart from Kiwibank in Reach.
Kiwibank is one of only a couple of lending institutes that won't enable brokers to act for their customers.
They specialise in targeting middle class, lower income people for smaller loans, as Kiwibank has lesser larger loans they stand unable to make a profit or income and hence are now over $60 million down.
As far as I'm aware Kiwibank in Reach is there only 95% lend product available and this does only apply to people wishing to purchase OOD (Owner Ocuppied Dwelling)
Interest rates and other products now offered by Kiwibank are matched by all major lending institutes, and for Property investors it is the last place they should approach.
Interest rates and other products now offered by Kiwibank are matched by all major lending institutes
Kiwibank's advertised floating rate is 6.55%
Please tell me which major lending institutions have such a good rate. We are currently paying 6.75% for our floating rate.
I also think as a taxpayer subsidising Kiwibank I should borrow from them but as I don't need a new mortgage at the moment it's not worth the cost of moving.
When I say that other lending institutes can match these rates this is by taking advantages of there products which often go unadvertised, and this is where brokers can come in very handy.
For example, ANZ have ANZ Select, when you arrange finance using this particular product it automatically gives you .5% discount from floating rates and .2% on fixed for the life of you loan, this is how it matches the likes of kiwibank.
In our opinion, with ANZ you use less equity and therefore can purchase more properties over time than with any other NZ Lender, ANZ allow more rental income to service the Mortgage and can in some cases lend 90% across a portfolio as opposed to most lenders at 80% the packages that they are offering on large lending cannot be beaten at this time by any other lender.
Don't forget that there is a realtime mortgage rate feed on PT on the left hand side -it gets updated everytime the page is refreshed! The data comes from GoodReturns web site.
For example, ANZ have ANZ Select, when you arrange finance using this particular product it automatically gives you .5% discount from floating rates and .2% on fixed for the life of you loan, this is how it matches the likes of kiwibank.
Thanks Rae, I had discovered ANZ select some time ago but when I saw the $23/month fee I didn't look further and forgot all about it. Obviously the bigger the loan, the better deal that ANZ select offers.
I will have to remember this when I'm looking for a large loan!
Can you advise what banks/brokers consider to be a large loan?
One other bad thing I found out about Kiwibank is they are very selective in what property they will lend on. When I enquired a couple of months ago I was told they would not lend on anything involving more than five units, so that rules out even small apartment buildings or townhouse complexes.
I was after a loan on a 28m2 one bedroom apartment at the time so I didn't seriously expect Kiwibank to lend on it!
Just to let you know that when dealing with the likes of ANZ through a NZMBA approved broker this $23 per month fee is often waived.
With regards to what is to be considered a large loan by banks/ brokers a median would be around $150,000 this is when clients start to gain real benefits based on the amount.
Remember it's not about the interest rates soley it's how your structure your Mortgage.
Kiwibank for overseas investors
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