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Thrive, survive, strive, arrive alive, revive… thrive?

Against the backdrop of a slower economy than expected, specialist lenders are capitalising on change – aiming to grow their market share through speed, flexibility and strong adviser partnerships

Ian Boyce

Avanti Finance

Industry experts

Phil Bennett

First Mortgage Trust

Campbell Smith

Pepper Money

Daniel McGrath

Xceda

Ian Boyce has over 35 years of experience in financial services, banking and insurance. He has previously held several senior leadership roles at ASB Bank, driving growth, profitability and strategic initiatives. In November 2022, Boyce joined Avanti Finance as general manager property. His role with the support of the wider Avanti team is to continue the profitable growth Avanti has enjoyed in the very competitive New Zealand property market. Boyce is also one of only 12 New Zealanders named to the prestigious 2024 Mortgage Global 100 list.

Avanti Finance

Ian Boyce

Phil Bennett is head of lending at First Mortgage Trust (FMT). He has a wealth of experience in New Zealand’s banking sector. FMT is New Zealand’s largest specialist lender of first mortgages, providing funds for residential, commercial, industrial and rural investments and developments across the country.

First Mortgage Trust

Phil Bennett

Campbell Smith is country head at Pepper Money New Zealand. With over 20 years’ experience in the banking and financial services industry, Smith has substantial executive leadership, financial and operational expertise, having worked in various commercial functions across mortgages and asset finance. Prior to joining Pepper Money, he was director and country manager at LeasePlan and held roles at organisations such as Westpac and Turners Automotive Group.

Pepper Money

Campbell Smith

Daniel McGrath is CEO of Xceda, bringing a strong background in corporate and finance law to lead the business through New Zealand’s evolving regulatory landscape. He is passionate about building a high-performing, customer-focused team that blends digital innovation with personal service. McGrath plays a key role in shaping Xceda’s governance and compliance functions, ensuring the business is well positioned for growth, especially in the expanding specialist lending market. He advocates for proportionate regulation and open industry dialogue to support better outcomes for customers and lenders alike.

Xceda

Daniel McGrath

“Specialist lending is only about 2% of the residential market. When you compare that to Australia, it just shows how significant the opportunity is”

Ian Boyce, Avanti Finance

First we WERE supposed to thrive in ’25, and then it became simply survive. But let’s face it – as the year draws to a close, even arriving alive has been difficult for some. Sounding less like an economic revival and more like a dangerous-driving awareness campaign, the year hasn’t been as good as many had hoped. While the financial easing cycle is well underway, it’s now inspired to a degree by a persistent economic stagnation that wasn’t part of the original plan. Indicators such as consumer and investor confidence remain weak, and the worse-than-expected negative growth of the economy in the June quarter contrasts sharply with the cautious optimism at the beginning of the year. “[New Zealand has] had a pretty tough five years since COVID,” said Daniel McGrath, chief executive of Xceda, at a recent Executive Insights panel on NZ Adviser TV featuring non-bank leaders. “High interest rates to low interest rates, government stimulation, low growth – it’d be great to see a 2026 where we start seeing some consistent growth.”

“The more engagement I have with advisers who aren’t necessarily used to non-banks, the more you provide them with examples of past clients and past scenarios … that’s most effective”

Daniel McGrath, Xceda

“We’re looking to use technology to help us speed up our origination, approval and settlement, but also keeping that human touch and keeping that national footprint”

Phil Bennett, First Mortgage Trust

“We want to see the New Zealand ecosystem not just survive but thrive over 2026. Next year represents a fantastic opportunity to do just that”

Campbell Smith, Pepper Money

A prosperous entrepreneur gazes ahead through a telescope

Read on

Xceda is a trusted New Zealand non-bank deposit-taker, founded in 1989 and regulated by the Reserve Bank of New Zealand. Originally established in Whakatāne as a regional asset lender, the company has grown into a nationwide operation offering tailored lending solutions, including short-term bridging finance and long-term property loans. As one of only a small number of licensed institutions, Xceda’s strong regulatory standing reflects its commitment to responsible lending. With over three decades of experience and a focus on personalised service, Xceda proudly helps New Zealanders achieve their financial goals with confidence.

Find out more

Pepper Money is a leading non-bank lender in Australia and New Zealand. The company was established in 2000 as a specialist residential home loan lender in Australia with a focus on providing innovative home loan solutions to customers who were being underserved by traditional lenders. Pepper Money today has a broad product offering of residential home loans, asset finance, commercial real estate and novated leases in Australia and residential home loans in New Zealand.

Find out more

First Mortgage Trust (FMT) is an investment fund manager specialising in investments and property finance. For nearly 30 years, FMT has been helping New Zealanders protect and grow their wealth by providing consistent investment returns. Today, the company has over $1.7 billion in funds under management and more than 6,600 investors nationwide. FMT also provides clients with tailored property finance through first mortgages across the residential, commercial, industrial and retail property sectors in New Zealand. FMT has offices in Auckland, Tauranga, Wellington and Christchurch, with over 70 staff members, and is continuing to grow to meet market demand.

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M&A Insights 2021

Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance

Read on

Trevor Baldwin

Baldwin Risk Partners

Phil Trem

MarshBerry

Timothy J. Hall

Relation Insurance

Gerard Vecchio

MarshBerry

Industry experts

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Mashberry

Gerard Vecchio

Relation Insurance

Timothy J. Hall

Mashberry

Phil Trem

Baldwin Risk Partner

Trevor Baldwin

In Partnership with

M&A Insights 2021

Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance

Read on

Trevor Baldwin

Baldwin Risk Partners

Phil Trem

MarshBerry

Timothy J. Hall

Relation Insurance

Gerard Vecchio

MarshBerry

Industry experts

Baldwin Risk Partners

Trevor Baldwin

Mashberry

Phil Trem

Relation Insurance

Timothy J. Hall

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec. Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo or24ci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.

Mashberry

Gerard Vecchio

Published 27 Oct 2025

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McGrath was joined on the panel by Pepper Money New Zealand country head Campbell Smith, Avanti Finance general manager property Ian Boyce and First Mortgage Trust head of lending Phil Bennett. While the broader economy wobbles, New Zealand’s specialist lenders – also known as non-banks – are using this moment to push forward. They see a chance to expand their sliver of the mortgage market, capitalising on adviser relationships, regional resilience and a demand for speed and flexibility that the big banks have struggled to meet. Their ambitions stretch well beyond the current downturn – aiming to capture larger market share, shape customer expectations and position non-banks for a stronger 2026. “Specialist lending is only about 2% of the residential market,” Boyce said. “When you compare that to Australia, it just shows how significant the opportunity is.” The latest Reserve Bank of Australia Financial Stability Review, published in October, reports that registered financial corporations – thought to hold roughly half of non-bank assets in the system – account for just under 5% of residential lending across the Tasman. And this is growing at an annual clip of around 10%. Here in New Zealand, central bank data shows that non-bank lending to the housing sector, while higher than a few years ago, actually shrank over the last 12 months.

Proudly locally founded and operated, Avanti Finance is an award-winning specialist lender that’s been helping New Zealanders achieve their financial goals for over 36 years. Through a trusted network of introducers, Avanti Finance offers one of the broadest lending portfolios in the New Zealand market, including property, auto, personal and business loans. By investing in innovation and technology, Avanti sustains a competitive edge and is poised for continued growth.

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Even so, the adviser channel has steadily grown since COVID, and industry leaders commonly put lending via third party around the 50% mark – a positive sign for non-banks, which rely on this channel for the bulk of originations. Much of this growth can be attributed to taking advantage of opportunities offered by specialist lenders, as they can move faster than traditional banks and are more flexible. There are other nascent tailwinds that are positive for local non-banks’ growth ambitions. Other than cheaper interest rates, credit defaults are falling in some business sectors after rising for many months, customer needs are becoming increasingly complex, regional markets are showing divergent trends, and technology is reshaping how lenders and advisers interact. Speed versus personalisation challengeWhile major banks have sometimes struggled with processing volumes and turnaround times, non-bank lenders have focused on combining rapid decision-making with personalised service – a balance that’s becoming increasingly important as cost of living pressures mount. “Speed and convenience is absolutely needed; borrowers are looking for fast decisions to empower them to act in changing market conditions,” Smith explained. “That said, that speed and automation still needs to provide for personalised lending solutions. It can’t be a pure-play algorithmic approach that is often seen at main banks.” The personalisation extends to ongoing customer relationships. Smith said Pepper Money remains “highly available to our advisers, and we’re here to help, be it over the phone, via email or in person to workshop a deal and help an adviser develop the best solution for their clients’ needs”.

Boyce said Avanti Finance has responded to market opportunities by investing in both technology and people. “While banks have struggled with speed and volume, we’ve worked really hard on consistency across pricing, funding and processes,” he said. “We’ve launched a customer mobile app to improve the experience, broadened our product range to meet diverse needs, strengthened our credit function and operations to move faster, and expanded our business development and lending teams to strengthen our tailored support to our adviser network.” McGrath pointed to the flexibility customers now expect

around their existing facilities. “We’re seeing a lot more customers who might be paying on a longer-term principal and interest basis wanting to move to interest-only for some period of time,” he said. “They might even need capitalised interest or more lending out of their current facility.” This demand for flexibility is putting pressure on lenders’ technology systems, McGrath added. “What we don’t want to do is have the system say no – you can’t do that because it’s not set up for it.”

Bennett agreed flexibility has become essential. “There’s a need for flexibility, but also there’s a need for clear criteria, reliable turnaround, and communication that derisks those conversations. Advisers want structured equity options, and they’re also looking for regional insights to help,” he said. “We at FMT think we’ve turned up in three very practical ways,” Bennett explained. “First, we’ve delivered in excess of a billion dollars of new lending into what’s been a pretty tight market, and we feel that that’s generally helped advisers and their customers around transactions that the normal banks wouldn’t do. Secondly, we’ve provided speed and certainty around our decision-making, and that helps the advisers protect momentum on time-sensitive transactions. And then lastly, we feel that we’ve consistently shared our market insights and given real clarity to advisers around where our appetite sits and where we stand.”

Regional markets outpace major centresThe flight to regions that accelerated during the pandemic is continuing to reshape lending patterns, with areas outside Auckland and Wellington showing stronger resilience and growth prospects. Bennett sees the trend creating opportunities beyond the traditional focus on major centres. “Auckland probably continues to lag the national trend, particularly in residential activity,” he said. “By contrast, Christchurch and Central Otago are showing resilience and momentum, and that’s a good reminder that opportunity often sits outside of the main centres.” Smith from Pepper Money agreed the regional story remains strong. “We continue to see a flight to the regions, and the regional centres have outperformed the metro areas year-to-date,” he said. “Auckland and Wellington are both stabilising after significant declines. Christchurch and Hamilton are seeing modest growth.” Some regions are standout performers. Smith highlighted areas like Queenstown and Nelson as attractive to lifestyle-conscious buyers, while Waikato has benefited from construction activity and infrastructure links to Auckland. “Interestingly for us, we’ve also seen Southland and West Coast hold up pretty well,” Smith added. For McGrath, whose company Xceda was founded in Whakatāne in the Bay of Plenty, the regional opportunity goes beyond just residential lending. “There’s a lot of small business activity and a lot of small business owners in these regions,” McGrath said. “Those advisers in those regions provide a lot of great service, and non-bank lenders being an option for those advisers is really important.”

The Bay of Plenty exemplifies this regional strength, with Cotality data showing house values up around 1% over the past year, compared to Auckland’s decline. Boyce said Avanti has always focused on regional markets. “There’s no question the regions are showing more resilience than the major cities, although we are starting to see some green shoots,” he said. “We’ve always done really well in the regions thanks to our nationwide business development network – we have local people on the ground making sure we’ve got good regional coverage.” Technology investment acceleratesAll four lenders are investing heavily in technology, but with a focus on enhancing rather than replacing human relationships.

The technology push extends to better integration with advisers’ systems. “There’s a huge amount of technology coming on board, and all those things – if you get them right and you’re able to right-size them for your organisation – provide really good ways we can link up together,” McGrath said. Bennett at First Mortgage Trust is focusing technology investment on the under-$3 million lending space. “We’re looking to use technology to help us speed up our origination, approval and settlement,” he said, “but also keeping that human touch and keeping that national footprint.” Boyce highlighted Avanti’s recent API integration with New Zealand Financial Services Group as an example of technology improving efficiency for both lenders and advisers. “It enables faster processing for them and us and also allows us to validate data easily and avoid a lot of rework,” he said. But he stressed that technology must support rather than replace human relationships. “Technology has played a huge role, we see that, but also, it’s about personal relationships and conversations,” Boyce said. “That’s why we’ve invested in more business development managers. The future lies in serving all possible customers. While technology helps, it should always be people-led.”

Smith agreed the human element remains central to Pepper Money’s approach. “Advisers still want to be able to find a human for assistance when required, perhaps to workshop an opportunity with Pepper or just to discuss a scenario over the phone,” he said. Growth optimism for 2026Despite the challenging economic environment of recent years, there is confidence about prospects for 2026, driven by expectations of continued interest rate cuts and a property market recovery. Bennett takes a longer-term cyclical view of property markets. “I’ve always been a proponent that property works in a 21-year cycle,” he said. “So you’ll have a couple of seven-year growth cycles, and you’ll have three- or four-year down cycles. So I’m pretty confident that 2026 is going to see a bit of growth back in the market.”

Smith expects rates to continue falling, with the Reserve Bank potentially cutting again before Christmas. “That in itself will drive activity, improve affordability and, by doing so, unlock refinancing opportunities and encourage and activate first home buyers,” Smith said. “We’re already seeing a return of investors into the market, and I would expect first-time buyers to follow in the coming months.” Awareness of non-banks and the options available appears to be high among first home buyers. One recent survey found that as many as 9% of FHBs were considering non-banks for financing.

“The market is, in our view, quietly resetting, providing an opportunity for investors to re-enter at the bottom of the market or at least restructure their portfolios,” Smith added. Boyce shares this optimism about market conditions improving. “We’re really optimistic about this coming year,” he said. “As rates continue to fall, there’ll be renewed confidence and more opportunities. This positive outlook indicates a great opportunity for everyone.” Adviser relationships remain centralEven with heavy investment in technology, all four lenders emphasised the continuing importance of personal relationships with mortgage advisers. The challenge is supporting advisers with better tools and education while maintaining the human connections that differentiate non-bank lending.

Bennett identified three priorities for better supporting advisers: “Richer and more frequent communication around what’s an appetite and what’s not, practical enablement through training sessions and real case studies, and increased engagement with a focus on structured equity and development funding.” The education component is particularly important for expanding non-banks’ market share. McGrath said combining policy explanations with real-world scenarios is key. “In terms of adviser education, it’s very important that lenders are able to explain to advisers, who can then explain to their own customers, exactly what scenarios we like and don’t like,” he said. “The more engagement I have with advisers who aren’t necessarily used to non-banks, the more you provide them with examples of past clients and past scenarios … that’s most effective.”

development finance and structured equity transactions – areas where non-banks can particularly differentiate themselves from traditional banks. Bennett said First Mortgage Trust is “seeing some green shoots at the moment, and there is a good level of enquiry around development”, with well-located developers and proven operators re-entering the market. “We’re calibrating our appetite for land and structured equity transactions.” The development finance opportunity extends to business lending more broadly. Bennett noted that “there’s been a real lack of investment into business in recent times, and as we come out of the bottom of the cycle, it’s a great opportunity to start thinking about how we can help clients reinvest into their business”. Avanti Finance is expanding its property finance capabilities. The company has “broadened our offering to include property development”, Boyce said, and will “soon launch a long-term commercial lending product to complement our existing long-term residential finance and short-term bridging offering”. Smith sees structured lending as part of a broader investor resurgence. “This next property cycle is expected to be driven by strategic investors, and advisers who understand portfolio structure, tax implications, equity leveraging and equity release will be in high demand,” he said. McGrath pointed out that structured finance opportunities often arise in regional markets. “From a business lending perspective, but also just SME business owners who often have difficulties getting main bank lending when they have inconsistent cash flow or seasonal cash flow, those advisers in those regions provide a lot of great service,” McGrath said.

Larger market share ambitions While increasing lending market share to substantially higher levels is a goal shared by the panel participants, achieving it will require sustained execution on multiple fronts: technology investment, adviser relationships, product development and customer service. “I’d really love to see the non-bank lending market continue to grow as a percentage of the overall market,” McGrath said. “We’re still pretty low and down quite a bit from pre-GFC in terms of the proportion of lending that we do. The non-bank lending market has a great opportunity to grow to 10% of the overall market.” Aggregation platforms are facilitating growth with direct-to-lender channels and deal upload capabilities. “We’re all thinking about tech as lenders, we’re all investing in tech, so we’re trying to make life easier for advisers,” McGrath said. But technology alone won’t drive market share growth. Bennett emphasised the importance of demonstrating value beyond just doing deals the banks won’t touch. “We can do the deals that the banks can do, but we can do them faster with less conditions,” Bennett said. “We have a deeper knowledge and understanding of the market and the transaction.”

The challenge is building systems that can handle increasingly complex customer needs while maintaining the personal touch that differentiates non-banks from major banks. McGrath said Xceda is working on “a few technology advances around our core lending and core banking systems” that would underpin better customer service. “That goes to product creation,” McGrath explained. “We’ve got a couple of products we’re working on around both the mortgage space and then linking into deposit services for borrowers.”

Smith framed the relationship-building challenge in terms of expanding adviser capabilities. “Assist with expanding lending capabilities, build advisers’ knowledge of and relationships with all non-bank lenders,” he said. “Don’t wait to become an expert. Start by becoming accredited with Pepper and our non-bank peers so you’ve at least got that relationship in place.” The technology improvements also benefit adviser relationships. McGrath said Xceda runs monthly webinars for advisers, including induction programmes for those who haven’t used non-bank lenders before. “Those sorts of touchpoints are very important,” he said. Boyce said Avanti values speed, consistency and support in adviser relationships: “Overall, advisers value speed, consistency and support. We’re fully committed to investing in collaboration and ready to provide advisers with the tools, the systems and the personal support they need.” Structured finance and development opportunitiesAs the market begins to recover, several lenders are seeing renewed interest in

Summer recharge before big year aheadAs 2025 winds down, many in the lending sector plan to use New Zealand’s traditional summer break to recharge for what they expect will be a busy 2026. Smith will be “going bush” at an off-grid campsite in the Coromandel, accessible only by four-wheel drive. “Days consist of reading, chatting, swimming, collecting for the fire, cooking over said fire, and early nights – spending valuable time with loved ones,” he said. Bennett will be at the family property in Abel Tasman National Park, accessible only by boat or on foot. His goal this summer is to “teach my seven-year-old grandson how to drive the dinghy”. McGrath plans to “watch a lot of cricket and watch the Aussies tackle the Poms in the Ashes from a beach”, while Boyce is saving his holidays. “I’ve got a big trip planned for the middle of next year, so I’ll probably be working through,” Boyce said. The message from all four was consistent: take the break seriously. “Most people do take Christmas and a good chunk of January off if they’re able to,” McGrath said. “We encourage everyone to take as much as you can off in that period and come back rested, because if this year’s anything to go by, it’ll be another big year next year.” For an industry positioning itself for significant growth, that rest may be well-needed. The ambition to grow market share won’t be achieved through wishful thinking but through sustained execution across technology, relationships and service delivery. As Smith put it, “We want to see the New Zealand ecosystem not just survive but thrive over 2026. Next year represents a fantastic opportunity to do just that.”

Total housing sector lending by non-banks

Jun 2020 ($m)

Jun 2024 ($m)

Sep 2024 ($m)

Dec 2024 ($m)

Mar 2025 ($m)

Jun 2025 ($m)

3,352

5,817

5,572

5,281

5,102

5,038

Source: Reserve Bank of New Zealand, Non banks: Funding and claims by sector (T4)

Housing

Source: Perceptive Pipe Dream or Possibility: Home Buying Intentions in 2025 report

Through a mortgage adviser

28%

44%

19%

With financial help from parents or family

Through a non-bank lender

Not sure

Other

Directly with a bank

How prospective first home buyers plan to arrange finance