Background
A couple were looking to settle an Auckland investment property they purchased off plans in 2021 to add to their existing seven property rental portfolio.
Challenge
The clients had recently purchased an owner-occupied property so no loan repayment history could be evidenced. Also, both clients’ main income sources were from contract work and the balance from rental income. Their main bank had declined their application due to a lack of comfort around the sustainability of contract income and reliance on rental income.
Mitigants
Both clients had stable, long-term contract histories (over seven years) with both Government and private companies. We were comfortable that their income was sustainable given their professions and demonstrated history.
The property was a new build, so RBNZ exemptions applied allowing us to consider 80% LVR.
The clients further demonstrated:
- Clear credit history
- Good equity position across their portfolio
- Excellent loan and everyday account conduct
- Deposit from cash reserves
- Limited short-term consumer debts (small credit card)
- The property’s registered valuation supported the purchase price and read well.
Solution
We were comfortable supporting these clients with a long-term (Near Prime) first mortgage with our spring campaign pricing of 8.90% p.a (25 bps discount off our base rate of 9.15% p.a. for two years from settlement).
A great opportunity to assist the couple in growing their investment portfolio.
Loan amount: $994,000
Interest rate: Spring campaign 8.90% p.a. (9.15% p.a. with a 25 bps discount for 2 years)
Term: 30-year principal and interest repayments
Avanti fee: $5,000 (non-consumer)
Adviser fee: $5,000
Commission: 0.80% of the loan amount (subject to clawback if repaid in full within 24 months)
LVR: 80%
Rates and fees were valid at the drawdown of the specific loan facility in each case study, new loans are subject to the rate at application. A copy of our current rates and fees can be found here.