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Non-Resident Borrowers

With all the changes to non-resident borrowing, you need a broker on board who is up with the play. Check out the criteria here.

In 2016 our panel banks changed their lending criteria for non resident borrowers. In addition, the Reserve Bank reduced the maximum borrowing % for an investment property to 60%. They have now increased this to 70%.

These changes mean it is more important than ever for non resident clients to know the lie of the land before committing to a property purchase. Pre-approval is always best to ensure you fit lender criteria.


Who can Borrow

With changes to NZ law and lending policies over the past few years, our panel banks will now lend only to New Zealand citizens overseas, Australians, and Singaporeans. This applies, in the case of a joint loan, to both applicants.

So for those who are not New Zealand citizens or permanent residents, Australians, or citizens of Singapore, the door has effectively been shut for borrowing to purchase property in New Zealand through our lenders.


Criteria has also tightened around overseas income with all our lenders, bar one, withdrawing from lending to those who are self employed. Whether a sole trader or a director / shareholder of a company, all self employed income is captured here.

Again there is one lender who will look at self employed income, though this is on a case by case basis, and appears to be directed towards smaller companies (less than 5 employees) or those who are sole traders.


How is your Income Treated?

All the banks and other lenders have 'debt servicing models' to assess your ability to service (or repay) their loan.  The servicing criteria and calculations vary quite widely, so while you may fail with one you may pass with another.

There is no substitute for a personal assessment to see how much you can afford to borrow.

As a rule for non residents;

  • Lenders use an exchange rate risk ratio for your income, meaning that any surplus net income over expenses (excluding NZ rental income which is usually scaled anyway) has an exchange rate risk ratio applied. This varies from lender to lender and has a massive influence in servicing ability.
  • We will need salary and wage earners to demonstrate continuous employment in the same job, or a similar job, for 12 months.
  • Commission based earnings or bonuses may be discounted in some calculations we do.


Other Points to Note

The maximum borrowing % for a non resident is 70%, as any property is treated as an investment property.

Some property types are discounted further.

This means you will need to have at least a 30% deposit. This can be made up of cash or available equity in a property owned in NZ.

Changes and tightening of identification procedures worldwide in the wake of anti money laundering and terrorism legislation can mean that, if you do not have an existing relationship with the lender here, you may need to visit NZ in person to be suitably identified. Some lenders may allow identification procedures to be completed overseas by trusted referees, which may mean that a personal meeting may not be required, but this again depends on the lender.


The first thing to do

If you'd like to run a scenario past us, we will be glad to give you our initial thoughts.  Use this form and we'll be in touch.

The best thing to do is to register and complete our loan application pages.  This gives us the information we need to be able to assess your options properly.


This is what we will want from you

The following list will apply to most situations.  We've shown this here to give you an idea of the kind of things we may need, but please don't treat this as final.

We will tailor this to suit your circumstances and the needs of your loan application.

Identification: copy of passport identification.

Income: evidence of income by way of any one of the following;

  • a recent payslip (if it shows your annual salary) or your three most recent payslips,
  • a letter from your employer that confirms your annual salary and your length of employment with the employer,
  • a tax assessment from your tax authority for the last financial year,
  • last 2 years financial accounts prepared by a chartered accountant, if self employed (bearing in mind the comments above re self employment).

Deposit: evidence of your deposit is usually by way of savings account statements, term deposit certificates, and share certificates and needs to cover a six month period.

Account conduct: evidence of satisfactory account conduct requires three months bank statements from your day to day bank account (where your income is paid to).  These statements can be internet statements but they do need to show the running balance after each transaction.


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