When the main banks say no — or when your situation doesn’t fit their standard criteria — non-bank lenders offer an alternative path to mortgage finance in New Zealand. Understanding what non-banks offer, how they differ from banks, and what they cost helps you make an informed decision.
What Are Non-Bank Lenders?
Non-bank lenders (also called non-bank financial institutions or NBFIs) provide mortgages but are not registered banks. Key differences from banks:
Regulatory: Banks are registered under the Reserve Bank of NZ Act and subject to RBNZ’s LVR restrictions and capital requirements. Non-banks are licensed differently and, crucially, are not subject to the LVR restrictions that limit how much high-LVR lending banks can do.
Funding: Banks fund mortgages primarily through deposits. Non-banks typically fund through wholesale markets, securitisation, or institutional investors.
Credit assessment: Non-banks often have more flexible credit policies — willing to lend to borrowers that mainstream banks decline. This is their core value proposition.
Cost: Greater flexibility comes at a price. Non-bank rates are typically 0.5%–2.0% higher than bank rates, and fees (application, annual) are often higher.
The Main Non-Bank Lenders in NZ
| Lender | Speciality |
|---|---|
| Avanti Finance | Adverse credit, non-standard situations, second mortgages |
| Resimac | Self-employed, complex income, prime and near-prime |
| Pepper Money | Post-credit-event borrowers, non-standard income |
| Liberty Financial | Alternative income assessment |
| ASAP Finance | Short-term and bridging finance |
This is not an exhaustive list — the non-bank sector has several smaller players. A mortgage broker who works with non-banks can match your situation to the right lender.
When to Use a Non-Bank Lender
Declined by mainstream banks
If ANZ, ASB, BNZ, Westpac, or Kiwibank has declined your application, a non-bank may say yes. Common reasons mainstream banks decline that non-banks can work with:
- Adverse credit history (defaults, late payments)
- Insufficient self-employment records (less than 2 years)
- LVR too high for the bank’s allowable bucket (non-banks aren’t capped by RBNZ LVR rules)
- Non-standard income (irregular, commission-heavy, PAYE + self-employed mix)
- Property type issues (certain construction types some banks won’t touch)
Bridging strategy
A non-bank can get you into a property now, at a higher rate, while you:
- Clean up your credit history
- Build 2 years of self-employment records
- Build additional equity through payments and/or property value growth
After 1–2 years, refinance to a mainstream bank at a lower rate. This “bridging” use of non-bank lending is common and legitimate.
Speed of approval
Non-bank lenders often process applications faster than mainstream banks — useful when you need finance confirmed quickly (e.g., for an urgent auction or settlement).
Non-Bank vs Bank: The Cost Comparison
Example: $500,000 mortgage, 25-year term
| Lender type | Rate | Monthly repayment | Extra annual cost vs bank |
|---|---|---|---|
| Mainstream bank | 5.55% | $3,062 | — |
| Non-bank (near-prime) | 6.30% | $3,302 | $2,880/year |
| Non-bank (adverse credit) | 7.50% | $3,678 | $7,392/year |
The rate premium is real and significant. A 2-year stay at a non-bank before refinancing might cost $10,000–$15,000 more in interest than a bank. If it’s the difference between buying and not buying, many borrowers accept this. But don’t stay at a non-bank a day longer than necessary — refinance to a bank as soon as you qualify.
Fees at Non-Bank Lenders
Non-banks typically charge:
- Application/establishment fees: $500–$2,500 (higher than most banks)
- Annual service fees: $150–$500/year (rare at banks)
- Break/early repayment fees: Variable, sometimes more complex than bank break fee formulas
Always get a full schedule of fees before committing.
LVR at Non-Banks
Non-banks aren’t bound by RBNZ LVR restrictions. This means they can theoretically lend at LVRs above 80% for owner-occupiers and above 65% for investors. In practice:
- They still manage their risk — high-LVR lending at non-banks comes with a higher rate premium and often requires LMI-equivalent products or additional fees
- They won’t lend at any LVR regardless of risk — they have their own credit policies
But for a borrower with a 15% deposit who’s been declined everywhere, a non-bank willing to lend at 85% LVR (at a higher rate) is a viable option.
How to Access Non-Bank Lenders
Most non-banks don’t deal directly with borrowers — they work exclusively through licensed mortgage brokers. To access Avanti Finance, Resimac, Pepper Money, or similar, you need a broker with those lenders on their panel.
This is another reason to use a mortgage broker: they open the door to the full market, including non-bank options that aren’t available directly.
See Mortgage Broker vs Bank NZ and Using a Mortgage Broker NZ.
Where to check the latest data
Rates, fees and returns change often. Before deciding, check current figures yourself:
- interest.co.nz mortgage rates: tables of current floating and fixed home loan rates.
- The provider's own website: has its current rates, fees and full terms; these change more often than any comparison page.
- Financial Service Providers Register: shows whether a provider is registered to offer financial services in New Zealand.
Further Reading
- Declined for a Mortgage? What to Do — your options after a bank decline
- Self-Employed Mortgage NZ — self-employed routes including non-banks
- Mortgage Lenders NZ 2026: Banks Compared: comparing all lenders including non-banks
- Mortgage Broker vs Bank NZ — why a broker is essential for non-bank access
- Getting a Mortgage in NZ — the full application process