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Some lenders are offering loans to people who might not have qualified for them last year, according to Damian Smith chief executive of RateCity.  

"[Institutions] are doing this because home lending remains very subdued, and they need to kick start the market to keep profits growing," Smith said.

But he added that the luxury of borrowing sooner and with a smaller deposit comes at a risk - higher LMI costs, and ineligibility for the best mortgage deals.

A smaller deposit also makes borrowers more vulnerable to rate rises, said Smith.

Separately, Heritage Bank reported a huge 82% jump in its home loan enquiries in March this year - a phenomenon the bank attributed to customers being keen to explore other lending options.

"The message that there are alternatives out there that offer great deals is starting to have an impact," CEO John Minz said of the occurrence.

And, in February non-bank lender RESIMAC announced a series of policy changes to its specialist product range intended to simplify its offering.

The changes included a simpler borrower credit classification as well as increased loan and LVR amounts.

COO Allan Savin said at the time that RESIMAC's focus would be to deliver a broader range of products for non-traditional borrowers.


Related Stories

Huge jump in interest for Heritage Bank - Customers keen to explore the benefit of switching their home loan helped fuel an 82% jump in home loan inquiries at Heritage Bank in February, CEO John Minz has said.  

Non-bank changes rules, chases non-traditional market - Non-bank lender RESIMAC will make a series of policy changes to its specialist product range to simplify its offering to the non-traditional lending market.


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