Banks making "excess" profits, questions over unpublished "special" rates, frustration with the Credit Contracts and Consumer Finance Act (CCCFA), and challenges for both first home buyers and investors, are among issues mortgage brokers highlight about the mortgage market in interest.co.nz's inaugural mortgage broker survey.
The final question in interest.co.nz's mortgage broker survey asked respondents for comments on anything interesting or unusual going on in the mortgage industry that the survey hadn't covered. It would be fair to say there was a wide range of responses. A selection of these responses is published below.
2-5 year rates are still way to high.
Approach to rental income and expense calculation - everyone uses quite a different approach after the new CCCFA regs. Kainga Ora First Home package is still missing the mark for most buyers - income brackets are too low.
Bank making excess profits at the expense of consumers.
Banks competing without advertising to the public.
banks failing to look after existing customers.
Banks seems to be more willing to think outside the box and take a more conservative approach to expenses than in the past. They are now more willing to workshop problem deals before strait out declining. It's still very much a case of who's desk it lands on, but if you push back you do seem to get a bit of traction if you hit a non-proactive (less experienced) assessor.
BNZ being able to off 4.99% for 1 yr for new clients but not offer it to their existing clients. BNZ have worked to improve their document process for advisers - they are now still wordy but better. Bank BDMs are responsive & helpful to advisers. Banks need to match rate offers for existing clients when going to market with a discounted deal.
CCCFA is still a massive problem, too many questions which is making it too hard to borrow money. I gave up on a store card personally as it was just too hard and paid cash... seems crazy to me.
Families gifting funds to their kids should be allowed to register a 2nd mortgage or caveat on the property to cement their interest in the event the property is sold or the kids separate.
If I could have chosen BNZ for the worst back end process three times, I would have. Banks are lending responsibly, there is renewed competition regarding interest rates and this makes brokers very important in providing the right solution for the client.
It's amazing how some banks are still so hung up on expenses and others don't care at all.
Kainga Ora First Home Partners deal is available through the banks directly but not available for Mortgage advisers apart from SBS bank. Limiting the service we can provide.
Longer fixed terms 6-15yrs. Raise Investment Property LVR.
Not fair to standardise a minimum benchmark of expenses when some clients live quite frugally and/or run a lot of expenses under the business (which are already accounted for in their financials). Test rates appear too high if client is fixing longer term -bank has greater certainty over the rate rather than over shorter term.
Phone Help Lines!! OMG - All of the banks are absolute shockers and when you call to discuss something most say they have a queue due to Covid (2yrs on and still using this excuse) yet the real reason is they are just not providing the staff and the queues are hours long. I have been tempted to do a study to find out who has the longest and shortest queue just haven't got the resource to wait that long.
Some banks are still assessing borrowing capacity when customers are only wanting to substitute security with no increase in borrowing, even though clients have an impeccable record with their loan. This is not the big 4 but the smaller banks who are still taking a rigid approach to the CCCFA. In the worst cases this is actually stopping people selling homes and reducing debt by downsizing - the opposite of what CCCFA should be achieving.
The CCCFA changes are going to tip clients over especially in the investment space. Many investors will struggle to get interest only terms rolled over and the combination of having to make principal payments on top of the tax changes (interest deductibility) and the large increase in rates will prove to be too large a burden for some to bare.
The way how credit card limits are calculated, basically banks are double counting expenses because most of the expenses are through credit cards but the limit themselves regardless if it is utilized or not has a separate calculation with regards to serviceability.
Very judgemental regarding discretionary spending.
With influx of first home buyers, i think banks should make it easier for first home buyers, provide better interest rates & cash contributions. It would also be more helpful if they could provide a "pre-approval" instead of only accepting live deals. It is ideal time for first home buyers to get into the market but the banks are continuously making it really hard for them to get a reasonable level of lending approved, at very expensive rates.
Yeah anti competitive behavior by ASB i.e not making it easy to produce home loan statements if customers are on interest only for example they don't come through with balances & names just transactions....shoe on the other foot they would expect a proper statement from BNZ. Also don't like all this retention cash back...directly stopping the churn and biting the mouth that feeds them i.e advisers.
Interest.co.nz launched a mortgage broker survey to give us, and our readers, a better understanding of what's going on in the mortgage market. We wanted to know more about the key issues driving the market at a snapshot in time, how the key mortgage lending banks are behaving, and where their focus is. Following our initial survey, subsequent ones will provide details on changes, and new developments, in the market over time.
The survey asked mortgage brokers a range of questions, with the survey taking place between the end of February and the end of March. The survey was conducted by Curia Market Research by email and text. There were 160 respondents.
Banks we asked about in the survey questions were ANZ, ASB, BNZ, Kiwibank, The Co-operative Bank, Heartland Bank, HSBC, SBS Bank, TSB and Westpac.
This is the fourth and final story interest.co.nz is publishing based on the survey results.
The first part is here: covering how mortgage brokers assess individual banks.
The second part is here: covering what borrowers want from their banks.
The third part is here: assessing how 'stuck' borrowers are with their banks.
This analysis was first released in the Banking & Finance Daily Newsletter, a subscription newsletter for senior finance industry executives. You can subscribe here.