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Xceda is a non-bank deposit taker licensed and regulated by the Reserve Bank of New Zealand, with a history dating back to 1989. Originally established in Whakatāne as a regional asset lender, Xceda has grown into a nationwide operation offering tailored lending solutions, including short-term bridging finance and long-term property loans. Being one of only a small number of Reserve Bank-licensed institutions reflects our strong regulatory standing and commitment to responsible lending. With more than three decades of experience and a focus on personalised service, Xceda helps New Zealanders achieve their financial goals with confidence.
Find out more
First Mortgage Trust (FMT) is an investment fund manager specialising in property finance. For 30 years, FMT has been helping New Zealanders protect and grow their wealth by providing consistent investment returns. Today, the company has over $2 billion in funds under management and more than 7,500 investors nationwide. FMT also provides mortgage advisers and clients with tailored property finance through first mortgages across the residential, commercial, industrial, construction and development 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.
Find out more
Basecorp Finance is a New Zealand owned non-bank lender offering flexible first mortgage solutions since 1997. We specialise in all types of first mortgage lending, including short-term bridging, long-term home loans and finance for commercial property and vacant land. We source loans through adviser networks, with fast approvals within 24–48 hours, risk-based pricing and an experienced underwriting team. Our diversified funding base supports sustainable growth, a book above $1.2 billion and continued reliable adviser support across New Zealand.
Find out more
Proudly Kiwi founded and owned, Avanti Finance is an award-winning specialist lender that has helped New Zealanders achieve their financial goals for over 36 years. We offer a broad range of tailored lending solutions – including long-term first mortgages, short-term bridging, property investment, property development and commercial property lending, as well as auto, personal and business loans – through our trusted introducers network. As a progressive introducer-led business, we’re built to back people, move lending forward and deliver the best possible outcome for both our introducers and their clients.
Find out more
Pepper Money is Australia and New Zealand’s leading non-bank lender. It was established in 2000 as a specialist residential home loan lender in Australia with a focus on providing innovative home loan solutions to customers that 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
Interest rates may have eased, but for many New Zealanders the gap between what banks will fund and what borrowers need still feels unbridgeable. Into that space, specialist lenders have been building fast, pairing 24-hour turnaround times with tailored structures that can keep a purchase, refinance or development from slipping away at the last minute.
How are non-banks and specialist lenders turning that gap into a growth engine? By scaling up in response to more complex borrower profiles, using speed and regulatory flexibility to support time-sensitive deals and deepening their partnerships with advisers. Sector leaders reveal who is turning to specialist lending, how providers are balancing opportunity with risk and why a sector that still accounts for only a small share of total lending sees 2026 as a year to build on that momentum.
Specialist lenders have a lower profile than banks, but many are currently experiencing their strongest growth in years, filling a gap between bank appetite and borrower need.
“We’re feeling positive about what we are seeing out there, with clear improvements economy-wide in business confidence, REINZ and GDP data, and a lower OCR that is assisting with non-bank and floating rate demand,” says Craig Rolls, director of Basecorp and head of lending. “Overall, we had a good 2025 despite strong bank competition with aggregate book growth resuming.”
Non-banks and specialist lenders continue to play an increasingly important role in New Zealand’s mortgage and finance landscape as the market changes.
“As borrower needs become more diverse and financial situations more complex, non-bank lenders are stepping in with flexible, tailored solutions that traditional lenders may not be structured to provide,” says Pepper Money New Zealand country head Campbell Smith. “In 2026, we’re seeing even stronger consumer preference for third-party advice and access to finance. That shift is accelerating innovation and competition, and it’s helping create a more inclusive lending ecosystem where more New Zealanders can find pathways that genuinely suit their circumstances.”
Other non-banks also see momentum growing, with stabilising interest rates flowing through to more activity and renewed confidence across the housing ecosystem.
“With interest rates at or near the bottom of the current cycle, we are starting to see some positive movement in the New Zealand housing market, with modest growth in refinancing, first home buyers and investors returning to the market. This means opportunities across the entire ecosystem for both main banks and specialist lenders,” says Avanti Finance general manager property Ian Boyce.
“Specialist lenders are well positioned to capture these growth opportunities through niche positioning and strong adviser partnerships, particularly in supporting more complex and non-standard lending scenarios.”
Daniel McGrath, chief executive of Xceda, says the past two years have created conditions that are driving borrowers towards specialist options.
“The last 24 months has been a complex economic environment,” he explains. “We have experienced elevated interest rates in 2024, which then began to sharply decline in 2025. We also had significant cost of living pressures on households and an uncertain economic situation for businesses. These factors have increased demand for specialist lending.”
Specialist lenders are incrementally able to take advantage of subtle environmental changes and expand their areas of business.
“Although the banks still provide the bulk of the mortgage lending, there are situations where their products, credit risk parameters and processing time frames make access to mortgage funding challenging for some customers,” he says.
McGrath points to regulatory changes that have reshaped the economics of specialist lending for deposit-taking institutions.
“From a regulatory perspective, for RBNZ licensed deposit takers such as Xceda, the introduction in 2025 of the deposit compensation scheme has significantly reduced our cost of funding. Therefore, being a specialist lender with funding sourced from protected deposits creates an ideal position for us to offer competitive lending with greater scale and quality in our customer base,” says McGrath.
The 24-hour advantage In a market where timing can make or break a deal, speed has become the specialist lender’s most powerful weapon. While major banks grapple with higher activity levels and increasingly complex approval processes, non-bank lenders are building their value proposition around certainty and pace. Smith says the shift towards more diverse solutions is closely linked to this intense focus on execution and service.
“We’ve always focused on providing choice and flexibility for customers who sit outside mainstream lending criteria. That hasn’t changed – but advisers’ expectations have evolved,” says Smith. “Speed, flexibility and transparency remain essential, but advisers now also expect a deeper partnership. They want lenders who can help them navigate a more dynamic regulatory and economic environment, and who can support them with insights, tools and education.”
This is where non-banks outshine traditional lenders.
“Our short- and long-term product approvals can be delivered within 24 hours, through all cycles,” says Rolls. “And as bank approval times have lengthened, with higher activity levels and some of the refinance ‘specials’ in market, that service proposition will always appeal and be needed.”
The appeal extends beyond mere convenience. For advisers working with complex client scenarios, the ability to move quickly on time-sensitive opportunities – mortgagee sales, deceased estates, off-market properties – has become a competitive necessity.
“We are seeing experienced investors and developers become more tactical and ready to move quickly when opportunities arise,” says
Phil Bennett, head of lending at First Mortgage Trust (FMT). “Many are targeting time-sensitive transactions, where speed and certainty of funding are critical.”
Helping borrowers know where they stand is key.
“FMT supports these borrowers by providing fast, flexible lending solutions that enable them to act quickly,” says Bennett. “Our focus is on execution and certainty, helping borrowers progress their plans and achieve their goals.”
Specialist lenders are also working to ensure that speed is paired with clarity and sustainable outcomes over the long term.
“Advisers increasingly value a collaborative approach where lenders work alongside them to deliver sustainable outcomes for clients — not just at application or settlement but over the long term,” says Smith.
Beyond the regulatory fence But speed alone doesn’t explain the sector’s growth. Specialist lenders operate in a different regulatory environment – one that can prove liberating for both advisers and borrowers constrained by macroprudential rules.
“Regulation matters too, and while macroprudential standards have eased in recent months, advisers can disregard both DTIs and the LVR speed limits when dealing with us,” says Rolls.
This regulatory flexibility has opened pathways for borrowers who find themselves on the wrong side of bank lending criteria through no fault of their own. The profile is diverse: self-employed business owners, new immigrants with limited New Zealand credit history, multigenerational family groups pooling resources and investors expanding portfolios. Rolls says that breadth is deliberate rather than incidental.
“We see all types of borrowers through advisers and don’t have a particular niche here – any borrower who the bank can’t assist with is potentially a Basecorp customer,” says Rolls. “Whether that’s first home buyers, property traders, self-employed borrowers or investors in either of the residential or commercial spaces, we have a broad-based credit policy for all these situations and are continually looking to expand options for the adviser network.”
Avanti Finance has seen distinct patterns emerge across its lending book over the past 12 months. “The past year has seen a rise in multigenerational lending, high-LVR lending and borrowers seeking debt consolidation solutions to improve their financial situation before entering homeownership,” says Boyce.
McGrath has observed similar diversity in the types of scenarios landing at Xceda’s door.
“We are seeing a broad range of borrowers, but common scenarios include property owners navigating sale-and-purchase timing mismatches, investors looking to buy a property outside of their main bank portfolio, borrowers who are temporarily outside mainstream credit criteria due to income complexity, and over-age-50 customers looking for equity release loans for varied purposes, for example, to act as the ‘bank of mum and dad’,” says McGrath.
Smith says this focus on inclusion is grounded in real-world experience of how people earn, save and rebuild resilience after financial shocks.
“Consumers remain cautious, and that shapes how they borrow, spend and plan. But within that caution lies opportunity. Non-banks are well positioned to support customers who need flexible, innovative solutions, particularly those who fall just outside traditional lending criteria.”
The changing face of borrowers Multigenerational lending applications have surged as families band together to overcome deposit hurdles. Parents and adult children are jointly purchasing properties, choosing ownership over perpetual renting. The pressure driving these arrangements is evident in the data. According to Kiwibank's 2025 State of Home Ownership survey, 57% of New Zealanders feel locked out of the property market, while 60% cite the high cost of living as the biggest challenge to buying a first home. The ability to save for a deposit remains stubbornly difficult for 45% of would-be buyers.
Rolls is also seeing clear shifts in how borrowers frame their property ambitions and the types of deals coming across advisers’ desks.
“There’s been a couple of clear changes in the market from our perspective. The first is smaller mortgage sizes generally – driven by affordability pressures and the higher interest rates of recent years,” says Rolls. “Some of this has led to an increase in regional loans for us and is part of the reason why Auckland and Wellington have been slower than typical markets.”
Borrowers are also rethinking what getting on the ladder looks like.
“People are adjusting expectations – smaller homes, different locations or shared ownership structures are becoming more common,” says Smith. “We’re seeing borrowers take a more strategic approach: tidying up debt, restructuring income and planning earlier. Our response has been to build more flexible
products and work closely with advisers so borrowers can make informed, realistic decisions.”
Meanwhile, self-employed business owners who weathered the economic turbulence of 2025 are emerging with equity release needs – capital for expansion, working capital and development projects. “We’re seeing increased demand from self-employed business owners seeking equity release for working capital, development projects and business expansion,” says Bennett. “Many of these are fundamentally strong businesses that experienced short-term cash flow pressure during the tighter economic conditions of 2025 but remain fully committed to continuing to grow and invest in their communities.”
The developer segment tells its own story about market adaptation. With consumer preferences shifting away from high-density apartment developments towards more liveable, lower-density projects, specialist lenders have provided the flexible capital structures that allow developers to pivot.
“Recently, developers have recognised a shift in homeowner preferences, moving away from high-density, multi-level projects towards fewer, more liveable homes, particularly in Auckland and Canterbury, bringing back a bit of the traditional Kiwi lifestyle,” says Bennett. “Coupled with a reduction in construction costs, these developments are better aligned with current consumer affordability.”
Walking the risk tightrope For all the optimism about growth, specialist lending operates in higher-risk territory than traditional banking. The question of how to balance access with prudence runs through every lending decision, particularly as competition intensifies for quality deals.
“With a lower number of deals in the market, we are hearing of loan applications being spread across multiple specialist lenders,” says Bennett. “This has created increased competition on pricing and fees and terms, as lenders compete to win quality deals.”
Smith agrees that sustainable growth depends on lenders maintaining a strong risk and compliance focus alongside their appetite for innovation.
“Regulation continues to evolve, and that’s something we take seriously. The key is staying proactive – anticipating change rather than reacting to it,” says Smith. “For non-banks, maintaining a competitive edge while remaining compliant means investing in strong governance, robust compliance frameworks and a culture of transparency. When lenders demonstrate that they operate responsibly and with integrity, they build trust with regulators, advisers and customers alike. Ultimately, compliance and competitiveness aren’t opposing forces – they reinforce each other when done well.”
McGrath says that at Xceda, flexibility must be exercised within clear boundaries set by regulatory requirements and industry best practice.
“As a specialist lender where flexibility is our strength, it remains imperative we do so within the parameters of regulation, compliance and best practice. Over the past three years, Xceda has been deeply involved in the consultation process with all regulators, including the Reserve Bank under the new Deposit Takers Act and with the FMA in relation to the new Conduct of Financial Institutions [COFI] legislation,” says McGrath. “Providing products to customers which focus on their tailored needs, transparent disclosure and fair conduct is core to our business.”
FMT’s response has been to double down on governance. In 2025, the firm added a chief risk officer to its senior leadership team and reached a significant milestone: $2 billion in funds under management while delivering returns averaging 230 basis points above 12-month bank term deposit rates.
Basecorp’s strategy centres on combining speed with discipline – maintaining conservative LVR settings while offering flexible credit policies.
“We’ve always sought to combine speed with discipline – 24-hour turnarounds combined with conservative LVR settings, good funds availability and loan applications reviewed by experienced underwriters within a flexible lending policy,” says Rolls.
At Avanti Finance, the balance has involved maintaining strong credit discipline while introducing targeted policy enhancements to give advisers greater flexibility.
“Over the past 12 months, we’ve focused on maintaining our strong credit discipline while enhancing access to lending where it’s appropriate,” says Boyce. “As the economy recovers and property market activity gradually picks up, we’ve introduced a series of targeted policy enhancements to give advisers greater flexibility without compromising prudent risk management.”
The four per cent opportunity Despite recent growth, specialist lending remains a small slice of New Zealand’s total lending market, with housing specialist lending even smaller. New Zealand is often compared with Australia in terms of latent potential, where the share of specialist lending is higher. Boyce sees the trans-Tasman gap as an opportunity driven by increasing borrower complexity.
“Specialist lending currently accounts for around 4% of New Zealand’s total lending market, compared with approximately 7% in Australia,” says Boyce. “The gap highlights clear growth opportunities for the specialist lending sector as borrower profiles become more complex and increasingly require fit-for-purpose solutions to meet their unique needs.”
McGrath agrees on the potential for expansion. Given the above figures for New Zealand and Australia, he adds that “there is therefore ample room for growth, and we believe specialist lenders that adopt fintech and other customer-focus tools will only add to this potential.”
Smith says those opportunities will only be realised if lenders and advisers continue to work together to raise awareness and confidence in non-bank options.
“Banks will always be the backbone of the market, but non banks are increasingly the pressure valve, stepping in where traditional criteria fall short,” says Smith. “Advisers play a critical role in that education process. The collaboration between advisers and non-bank lenders is essential to raising awareness of the value non-banks bring and ensuring customers feel informed and supported. At Pepper Money, we’ve continued to invest heavily in adviser education – through our Quarterly Insights, our ongoing training webinars and our digital tools that make non-bank lending easier to understand and easier to access. The more we lift awareness of non-bank solutions, the more opportunities advisers have to help customers achieve their goals.”
This growth trajectory depends heavily on the adviser channel. As borrower situations become more complex, advisers equipped with deep knowledge of specialist lending options will be best positioned to serve their clients.
“As more borrowers turn to advisers for personalised advice, those who embrace specialist lending will be best positioned to capture growth and serve a broad range of customers,” says Boyce.
McGrath sees the relationship between specialist lenders, banks and advisers continuing to evolve as each plays to their strengths.
“Specialist lenders will continue to play an important role alongside the main banking system, providing structured mortgage solutions where flexibility, timing or complexity require a more tailored approach. Advisers are increasingly critical to this process, helping borrowers understand which pathway is appropriate and when,” says McGrath.
FMT has invested heavily in this relationship, maintaining what it claims is the largest team of business development managers in the specialist lending space, with regional coverage and dedicated construction and development expertise.
“We expect specialist lending to continue to grow, following trends seen overseas,” says Bennett. “As this part of the market expands, it’s important that advisers have a strong understanding of the specialist lenders available to them, so when a deal lands on their desk, they can place it confidently and support their clients effectively.”
The year ahead Looking forward to 2026, specialist lenders are preparing for expansion on multiple fronts. Product innovation, geographical reach and deeper adviser partnerships feature prominently in strategic planning. Boyce expects the sector to continue expanding and diversifying, with innovation playing a key role.
“We expect the specialist lending sector to continue expanding and diversifying, driven by broader product offerings and ongoing innovation to improve speed, efficiency and customer and adviser experiences,” says Boyce. “At Avanti Finance, we’ve invested heavily in these areas and will continue to do so.”
Avanti Finance is launching a new long-term commercial lending product to complement its existing suite of products, which spans first mortgages, bridging finance, caveat secured loans, unsecured personal loans, property investment and development loans.
“We’re kicking off 2026 with the launch of our new Commercial Property Loan product, designed to make funding more accessible for customers investing in properties for commercial use,” says Boyce.
Boyce says the goal of this investment is to support the adviser community as much as end-borrowers. “Ultimately, we’re in the business of helping advisers grow their business, by backing them with industry leading products, service and experience,” he says.
The growing importance of non-banks in this environment will depend on the extent to which the sector can help advisers support clients through continued uncertainty.
“In 2026, the sector continues to navigate a mix of global uncertainty, potential domestic policy changes and the lingering effects of several challenging economic years. While interest rates have eased, many households are still rebuilding financial resilience and confidence is improving but not yet fully restored,” says Smith. “The partnership between advisers and non-bank lenders remains central to delivering growth, supporting customers and strengthening the broader financial system.”
FMT has created another new role – strategic partnership manager – dedicated to strengthening relationships with aggregators and brokers, recognising that education and support will prove decisive as the sector expands.
“Our focus over the next 12–24 months will be on education, strong relationships and practical tools that help advisers place deals with confidence and achieve the best outcomes for their clients,” says Bennett.
The broader industry context adds urgency to these preparations. Advisers are facing pressure to find new income streams and expand their service offerings.
“With another bank removing trail commission, we expect advisers to continue diversifying their income streams and expanding the range of lending solutions they offer to clients,” says Bennett. “As a result, specialist lending is likely to play a bigger role as advisers look for ways to better support borrowers and build more resilient businesses.”
For Basecorp, the focus remains on consistency: maintaining diversified funding, tweaking lending policies to match market developments and delivering reliable service to the adviser network.
“For us, the priorities are to maintain diversified and significant funding to support that growth, tweak our lending policy further
to cater for market developments and support the adviser channel, and maintain consistency in our approach, risk settings and pricing,” says Rolls.
The sentiment across the sector is cautiously bullish.
“We expect to see continued growth in the specialist mortgage market,” says McGrath.
Interest rates look to have entered a period of relative stability, and the certainty that brings could herald a rise in property transaction volumes and better economic confidence. Expectations are solid, although the high cost of living, geopolitical developments and a resurgence in inflation may have the potential to spoil the party. For specialist lenders who’ve spent recent years building capability and credibility, 2026 looks like a year to capitalise if not across the board, then at least in better-performing pockets.
“The next 12–24 months should bring real growth – for New Zealand, the non-bank industry and ourselves – and we look forward to supporting advisers and their businesses as that occurs,” says Rolls.
Published 16 Feb 2026
57%
Oct 2024
Nov 2025
Feel locked out of the property market
63%
46%
Given up hope of owning a home
47%
45%
Interest rates easing makes ownership look more likely than a year ago
43%
Source: State of Home Ownership 2025 Survey Report (Kiwibank)
Aspirations around buying a home
35%
58%
Oct 2024
Nov 2025
High cost of living
Biggest challenges to buying a first home
59%
17%
High house prices
44%
17%
Ability to save for deposit
Low wages
High interest rates
Competing with property investors
Access to mortgage lending/credit
Government policies
33%
11%
24%
60%
57%
17%
45%
16%
38%
9%
Source: State of Home Ownership 2025 Survey Report (Kiwibank)
*Up to three answers possible
“There is … ample room for growth, and we believe specialist lenders that adopt fintech and other customer-focus tools will only add to this potential”
Daniel McGrath,
Xceda
“People are adjusting expectations – smaller homes, different locations or shared ownership structures are becoming more common. We’re seeing borrowers take a more strategic approach: tidying up debt, restructuring income and planning earlier”
Campbell Smith,
Pepper Money
“We are seeing experienced investors and developers become more tactical and ready to move quickly when opportunities arise”
Phil Bennett,
First Mortgage Trust
“We are starting to see some positive movement in the New Zealand housing market, with modest growth in refinancing, first home buyers and investors returning to the market. This means opportunities across the entire ecosystem”
Ian Boyce, Avanti Finance
“There’s been a couple of clear changes in the market from our perspective. The first is smaller mortgage sizes generally – driven by affordability pressures and the higher interest rates of recent years”
Craig Rolls, Basecorp
Campbell Smith
Pepper Money
Craig Rolls
Basecorp
Daniel McGrath
Xceda
Ian Boyce
Avanti Finance
Phil Bennett
First Mortgage Trust
Industry experts
As property confidence turns a corner, specialist lenders are stepping up with faster approvals, flexible structures and closer adviser partnerships, turning complex borrower needs into growth
Specialist lenders step up as borrower needs expand
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Campbell Smith is the country head for Pepper Money New Zealand. With over 20 years’ experience in the banking and financial services industry, Smith has substantial executive leadership, financial and operational experience, having worked in various commercial functions across mortgages and asset finance. In 2022, Smith joined Pepper Money from LeasePlan, where he was director and country manager. Prior to that, he worked at organisations such as Turners Automotive and Westpac.
Pepper Money
Campbell Smith
Daniel McGrath is CEO of Xceda, bringing a strong background in corporate and finance law to leading 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 with 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
Phil Bennett is head of lending at 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
Ian Boyce has over 35 years of experience in financial services, banking and insurance. He has held several senior leadership roles at ASB Bank, driving growth, profitability and strategic initiatives. Since joining Avanti Finance as general manager, property, in 2022, Boyce has led one of the industry’s largest and most award-winning property lending teams. Avanti Property Lending has made significant contributions consistently to Avanti Finance Group’s rapid growth, particularly in New Zealand’s highly competitive property market.
Avanti Finance
Ian Boyce
Craig Rolls is a director at Basecorp and its head of lending. Rolls has been with the business for almost 27 years and is an experienced lender well known to advisers in the industry.
Basecorp
Craig Rolls
Copyright © 1996-2026 KM Business Information NZ
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Xceda is a non-bank deposit taker licensed and regulated by the Reserve Bank of New Zealand, with a history dating back to 1989. Originally established in Whakatāne as a regional asset lender, Xceda has grown into a nationwide operation offering tailored lending solutions, including short-term bridging finance and long-term property loans. Being one of only a small number of Reserve Bank-licensed institutions reflects our strong regulatory standing and commitment to responsible lending. With more than three decades of experience and a focus on personalised service, Xceda helps New Zealanders achieve their financial goals with confidence.
Find out more
First Mortgage Trust (FMT) is an investment fund manager specialising in property finance. For 30 years, FMT has been helping New Zealanders protect and grow their wealth by providing consistent investment returns. Today, the company has over $2 billion in funds under management and more than 7,500 investors nationwide. FMT also provides mortgage advisers and clients with tailored property finance through first mortgages across the residential, commercial, industrial, construction and development 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.
Find out more
Basecorp Finance is a New Zealand owned non-bank lender offering flexible first mortgage solutions since 1997. We specialise in all types of first mortgage lending, including short-term bridging, long-term home loans and finance for commercial property and vacant land. We source loans through adviser networks, with fast approvals within 24–48 hours, risk-based pricing and an experienced underwriting team. Our diversified funding base supports sustainable growth, a book above $1.2 billion and continued reliable adviser support across New Zealand.
Find out more
Proudly Kiwi founded and owned, Avanti Finance is an award-winning specialist lender that has helped New Zealanders achieve their financial goals for over 36 years. We offer a broad range of tailored lending solutions – including long-term first mortgages, short-term bridging, property investment, property development and commercial property lending, as well as auto, personal and business loans – through our trusted introducers network. As a progressive introducer-led business, we’re built to back people, move lending forward and deliver the best possible outcome for both our introducers and their clients.
Find out more
Pepper Money is Australia and New Zealand’s leading non-bank lender. It was established in 2000 as a specialist residential home loan lender in Australia with a focus on providing innovative home loan solutions to customers that 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
Interest rates may have eased, but for many New Zealanders the gap between what banks will fund and what borrowers need still feels unbridgeable. Into that space, specialist lenders have been building fast, pairing 24-hour turnaround times with tailored structures that can keep a purchase, refinance or development from slipping away at the last minute.
How are non-banks and specialist lenders turning that gap into a growth engine? By scaling up in response to more complex borrower profiles, using speed and regulatory flexibility to support time-sensitive deals and deepening their partnerships with advisers. Sector leaders reveal who is turning to specialist lending, how providers are balancing opportunity with risk and why a sector that still accounts for only a small share of total lending sees 2026 as a year to build on that momentum.
Specialist lenders have a lower profile than banks, but many are currently experiencing their strongest growth in years, filling a gap between bank appetite and borrower need.
“We’re feeling positive about what we are seeing out there, with clear improvements economy-wide in business confidence, REINZ and GDP data, and a lower OCR that is assisting with non-bank and floating rate demand,” says Craig Rolls, director of Basecorp and head of lending. “Overall, we had a good 2025 despite strong bank competition with aggregate book growth resuming.”
Non-banks and specialist lenders continue to play an increasingly important role in New Zealand’s mortgage and finance landscape as the market changes.
“As borrower needs become more diverse and financial situations more complex, non-bank lenders are stepping in with flexible, tailored solutions that traditional lenders may not be structured to provide,” says Pepper Money New Zealand country head Campbell Smith. “In 2026, we’re seeing even stronger consumer preference for third-party advice and access to finance. That shift is accelerating innovation and competition, and it’s helping create a more inclusive lending ecosystem where more New Zealanders can find pathways that genuinely suit their circumstances.”
Other non-banks also see momentum growing, with stabilising interest rates flowing through to more activity and renewed confidence across the housing ecosystem.
“With interest rates at or near the bottom of the current cycle, we are starting to see some positive movement in the New Zealand housing market, with modest growth in refinancing, first home buyers and investors returning to the market. This means opportunities across the entire ecosystem for both main banks and specialist lenders,” says Avanti Finance general manager property Ian Boyce.
“Specialist lenders are well positioned to capture these growth opportunities through niche positioning and strong adviser partnerships, particularly in supporting more complex and non-standard lending scenarios.”
Daniel McGrath, chief executive of Xceda, says the past two years have created conditions that are driving borrowers towards specialist options.
“The last 24 months has been a complex economic environment,” he explains. “We have experienced elevated interest rates in 2024, which then began to sharply decline in 2025. We also had significant cost of living pressures on households and an uncertain economic situation for businesses. These factors have increased demand for specialist lending.”
Specialist lenders are incrementally able to take advantage of subtle environmental changes and expand their areas of business.
“Although the banks still provide the bulk of the mortgage lending, there are situations where their products, credit risk parameters and processing time frames make access to mortgage funding challenging for some customers,” he says.
McGrath points to regulatory changes that have reshaped the economics of specialist lending for deposit-taking institutions.
“From a regulatory perspective, for RBNZ licensed deposit takers such as Xceda, the introduction in 2025 of the deposit compensation scheme has significantly reduced our cost of funding. Therefore, being a specialist lender with funding sourced from protected deposits creates an ideal position for us to offer competitive lending with greater scale and quality in our customer base,” says McGrath.
The 24-hour advantage In a market where timing can make or break a deal, speed has become the specialist lender’s most powerful weapon. While major banks grapple with higher activity levels and increasingly complex approval processes, non-bank lenders are building their value proposition around certainty and pace. Smith says the shift towards more diverse solutions is closely linked to this intense focus on execution and service.
“We’ve always focused on providing choice and flexibility for customers who sit outside mainstream lending criteria. That hasn’t changed – but advisers’ expectations have evolved,” says Smith. “Speed, flexibility and transparency remain essential, but advisers now also expect a deeper partnership. They want lenders who can help them navigate a more dynamic regulatory and economic environment, and who can support them with insights, tools and education.”
This is where non-banks outshine traditional lenders.
“Our short- and long-term product approvals can be delivered within 24 hours, through all cycles,” says Rolls. “And as bank approval times have lengthened, with higher activity levels and some of the refinance ‘specials’ in market, that service proposition will always appeal and be needed.”
The appeal extends beyond mere convenience. For advisers working with complex client scenarios, the ability to move quickly on time-sensitive opportunities – mortgagee sales, deceased estates, off-market properties – has become a competitive necessity.
“We are seeing experienced investors and developers become more tactical and ready to move quickly when opportunities arise,” says Phil Bennett, head of lending at First Mortgage Trust (FMT). “Many are targeting time-sensitive transactions, where speed and certainty of funding are critical.”
Helping borrowers know where they stand is key.
“FMT supports these borrowers by providing fast, flexible lending solutions that enable them to act quickly,” says Bennett. “Our focus is on execution and certainty, helping borrowers progress their plans and achieve their goals.”
Specialist lenders are also working to ensure that speed is paired with clarity and sustainable outcomes over the long term.
“Advisers increasingly value a collaborative approach where lenders work alongside them to deliver sustainable outcomes for clients — not just at application or settlement but over the long term,” says Smith.
Beyond the regulatory fence But speed alone doesn’t explain the sector’s growth. Specialist lenders operate in a different regulatory environment – one that can prove liberating for both advisers and borrowers constrained by macroprudential rules.
“Regulation matters too, and while macroprudential standards have eased in recent months, advisers can disregard both DTIs and the LVR speed limits when dealing with us,” says Rolls.
This regulatory flexibility has opened pathways for borrowers who find themselves on the wrong side of bank lending criteria through no fault of their own. The profile is diverse: self-employed business owners, new immigrants with limited New Zealand credit history, multigenerational family groups pooling resources and investors expanding portfolios. Rolls says that breadth is deliberate rather than incidental.
“We see all types of borrowers through advisers and don’t have a particular niche here – any borrower who the bank can’t assist with is potentially a Basecorp customer,” says Rolls. “Whether that’s first home buyers, property traders, self-employed borrowers or investors in either of the residential or commercial spaces, we have a broad-based credit policy for all these situations and are continually looking to expand options for the adviser network.”
Avanti Finance has seen distinct patterns emerge across its lending book over the past 12 months. “The past year has seen a rise in multigenerational lending, high-LVR lending and borrowers seeking debt consolidation solutions to improve their financial situation before entering homeownership,” says Boyce.
McGrath has observed similar diversity in the types of scenarios landing at Xceda’s door.
“We are seeing a broad range of borrowers, but common scenarios include property owners navigating sale-and-purchase timing mismatches, investors looking to buy a property outside of their main bank portfolio, borrowers who are temporarily outside mainstream credit criteria due to income complexity, and over-age-50 customers looking for equity release loans for varied purposes, for example, to act as the ‘bank of mum and dad’,” says McGrath.
Smith says this focus on inclusion is grounded in real-world experience of how people earn, save and rebuild resilience after financial shocks.
“Consumers remain cautious, and that shapes how they borrow, spend and plan. But within that caution lies opportunity. Non-banks are well positioned to support customers who need flexible, innovative solutions, particularly those who fall just outside traditional lending criteria.”
The changing face of borrowers Multigenerational lending applications have surged as families band together to overcome deposit hurdles. Parents and adult children are jointly purchasing properties, choosing ownership over perpetual renting. The pressure driving these arrangements is evident in the data. According to Kiwibank's 2025 State of Home Ownership survey, 57% of New Zealanders feel locked out of the property market, while 60% cite the high cost of living as the biggest challenge to buying a first home. The ability to save for a deposit remains stubbornly difficult for 45% of would-be buyers.
Rolls is also seeing clear shifts in how borrowers frame their property ambitions and the types of deals coming across advisers’ desks.
“There’s been a couple of clear changes in the market from our perspective. The first is smaller mortgage sizes generally – driven by affordability pressures and the higher interest rates of recent years,” says Rolls. “Some of this has led to an increase in regional loans for us and is part of the reason why Auckland and Wellington have been slower than typical markets.”
Borrowers are also rethinking what getting on the ladder looks like.
“People are adjusting expectations – smaller homes, different locations or shared ownership structures are becoming more common,” says Smith. “We’re seeing borrowers take a more strategic approach: tidying up debt, restructuring income and planning earlier. Our response has been to build more flexible products and work closely with advisers so borrowers can make informed, realistic decisions.”
Meanwhile, self-employed business owners who weathered the economic turbulence of 2025 are emerging with equity release needs – capital for expansion, working capital and development projects. “We’re seeing increased demand from self-employed business owners seeking equity release for working capital, development projects and business expansion,” says Bennett. “Many of these are fundamentally strong businesses that experienced short-term cash flow pressure during the tighter economic conditions of 2025 but remain fully committed to continuing to grow and invest in their communities.”
The developer segment tells its own story about market adaptation. With consumer preferences shifting away from high-density apartment developments towards more liveable, lower-density projects, specialist lenders have provided the flexible capital structures that allow developers to pivot.
“Recently, developers have recognised a shift in homeowner preferences, moving away from high-density, multi-level projects towards fewer, more liveable homes, particularly in Auckland and Canterbury, bringing back a bit of the traditional Kiwi lifestyle,” says Bennett. “Coupled with a reduction in construction costs, these developments are better aligned with current consumer affordability.”
Walking the risk tightrope For all the optimism about growth, specialist lending operates in higher-risk territory than traditional banking. The question of how to balance access with prudence runs through every lending decision, particularly as competition intensifies for quality deals.
“With a lower number of deals in the market, we are hearing of loan applications being spread across multiple specialist lenders,” says Bennett. “This has created increased competition on pricing and fees and terms, as lenders compete to win quality deals.”
Smith agrees that sustainable growth depends on lenders maintaining a strong risk and compliance focus alongside their appetite for innovation.
“Regulation continues to evolve, and that’s something we take seriously. The key is staying proactive – anticipating change rather than reacting to it,” says Smith. “For non-banks, maintaining a competitive edge while remaining compliant means investing in strong governance, robust compliance frameworks and a culture of transparency. When lenders demonstrate that they operate responsibly and with integrity, they build trust with regulators, advisers and customers alike. Ultimately, compliance and competitiveness aren’t opposing forces – they reinforce each other when done well.”
McGrath says that at Xceda, flexibility must be exercised within clear boundaries set by regulatory requirements and industry best practice.
“As a specialist lender where flexibility is our strength, it remains imperative we do so within the parameters of regulation, compliance and best practice. Over the past three years, Xceda has been deeply involved in the consultation process with all regulators, including the Reserve Bank under the new Deposit Takers Act and with the FMA in relation to the new Conduct of Financial Institutions [COFI] legislation,” says McGrath. “Providing products to customers which focus on their tailored needs, transparent disclosure and fair conduct is core to our business.”
FMT’s response has been to double down on governance. In 2025, the firm added a chief risk officer to its senior leadership team and reached a significant milestone: $2 billion in funds under management while delivering returns averaging 230 basis points above 12-month bank term deposit rates.
Basecorp’s strategy centres on combining speed with discipline – maintaining conservative LVR settings while offering flexible credit policies.
“We’ve always sought to combine speed with discipline – 24-hour turnarounds combined with conservative LVR settings, good funds availability and loan applications reviewed by experienced underwriters within a flexible lending policy,” says Rolls.
At Avanti Finance, the balance has involved maintaining strong credit discipline while introducing targeted policy enhancements to give advisers greater flexibility.
“Over the past 12 months, we’ve focused on maintaining our strong credit discipline while enhancing access to lending where it’s appropriate,” says Boyce. “As the economy recovers and property market activity gradually picks up, we’ve introduced a series of targeted policy enhancements to give advisers greater flexibility without compromising prudent risk management.”
The four per cent opportunity Despite recent growth, specialist lending remains a small slice of New Zealand’s total lending market, with housing specialist lending even smaller. New Zealand is often compared with Australia in terms of latent potential, where the share of specialist lending is higher. Boyce sees the trans-Tasman gap as an opportunity driven by increasing borrower complexity.
“Specialist lending currently accounts for around 4% of New Zealand’s total lending market, compared with approximately 7% in Australia,” says Boyce. “The gap highlights clear growth opportunities for the specialist lending sector as borrower profiles become more complex and increasingly require fit-for-purpose solutions to meet their unique needs.”
McGrath agrees on the potential for expansion. Given the above figures for New Zealand and Australia, he adds that “there is therefore ample room for growth, and we believe specialist lenders that adopt fintech and other customer-focus tools will only add to this potential.”
Smith says those opportunities will only be realised if lenders and advisers continue to work together to raise awareness and confidence in non-bank options.
“Banks will always be the backbone of the market, but non banks are increasingly the pressure valve, stepping in where traditional criteria fall short,” says Smith. “Advisers play a critical role in that education process. The collaboration between advisers and non-bank lenders is essential to raising awareness of the value non-banks bring and ensuring customers feel informed and supported. At Pepper Money, we’ve continued to invest heavily in adviser education – through our Quarterly Insights, our ongoing training webinars and our digital tools that make non-bank lending easier to understand and easier to access. The more we lift awareness of non-bank solutions, the more opportunities advisers have to help customers achieve their goals.”
This growth trajectory depends heavily on the adviser channel. As borrower situations become more complex, advisers equipped with deep knowledge of specialist lending options will be best positioned to serve their clients.
“As more borrowers turn to advisers for personalised advice, those who embrace specialist lending will be best positioned to capture growth and serve a broad range of customers,” says Boyce.
McGrath sees the relationship between specialist lenders, banks and advisers continuing to evolve as each plays to their strengths.
“Specialist lenders will continue to play an important role alongside the main banking system, providing structured mortgage solutions where flexibility, timing or complexity require a more tailored approach. Advisers are increasingly critical to this process, helping borrowers understand which pathway is appropriate and when,” says McGrath.
FMT has invested heavily in this relationship, maintaining what it claims is the largest team of business development managers in the specialist lending space, with regional coverage and dedicated construction and development expertise.
“We expect specialist lending to continue to grow, following trends seen overseas,” says Bennett. “As this part of the market expands, it’s important that advisers have a strong understanding of the specialist lenders available to them, so when a deal lands on their desk, they can place it confidently and support their clients effectively.”
The year ahead Looking forward to 2026, specialist lenders are preparing for expansion on multiple fronts. Product innovation, geographical reach and deeper adviser partnerships feature prominently in strategic planning. Boyce expects the sector to continue expanding and diversifying, with innovation playing a key role.
“We expect the specialist lending sector to continue expanding and diversifying, driven by broader product offerings and ongoing innovation to improve speed, efficiency and customer and adviser experiences,” says Boyce. “At Avanti Finance, we’ve invested heavily in these areas and will continue to do so.”
Avanti Finance is launching a new long-term commercial lending product to complement its existing suite of products, which spans first mortgages, bridging finance, caveat secured loans, unsecured personal loans, property investment and development loans.
“We’re kicking off 2026 with the launch of our new Commercial Property Loan product, designed to make funding more accessible for customers investing in properties for commercial use,” says Boyce.
Boyce says the goal of this investment is to support the adviser community as much as end-borrowers. “Ultimately, we’re in the business of helping advisers grow their business, by backing them with industry leading products, service and experience,” he says.
The growing importance of non-banks in this environment will depend on the extent to which the sector can help advisers support clients through continued uncertainty.
“In 2026, the sector continues to navigate a mix of global uncertainty, potential domestic policy changes and the lingering effects of several challenging economic years. While interest rates have eased, many households are still rebuilding financial resilience and confidence is improving but not yet fully restored,” says Smith. “The partnership between advisers and non-bank lenders remains central to delivering growth, supporting customers and strengthening the broader financial system.”
FMT has created another new role – strategic partnership manager – dedicated to strengthening relationships with aggregators and brokers, recognising that education and support will prove decisive as the sector expands.
“Our focus over the next 12–24 months will be on education, strong relationships and practical tools that help advisers place deals with confidence and achieve the best outcomes for their clients,” says Bennett.
The broader industry context adds urgency to these preparations. Advisers are facing pressure to find new income streams and expand their service offerings.
“With another bank removing trail commission, we expect advisers to continue diversifying their income streams and expanding the range of lending solutions they offer to clients,” says Bennett. “As a result, specialist lending is likely to play a bigger role as advisers look for ways to better support borrowers and build more resilient businesses.”
For Basecorp, the focus remains on consistency: maintaining diversified funding, tweaking lending policies to match market developments and delivering reliable service to the adviser network.
“For us, the priorities are to maintain diversified and significant funding to support that growth, tweak our lending policy further to cater for market developments and support the adviser channel, and maintain consistency in our approach, risk settings and pricing,” says Rolls.
The sentiment across the sector is cautiously bullish.
“We expect to see continued growth in the specialist mortgage market,” says McGrath.
Interest rates look to have entered a period of relative stability, and the certainty that brings could herald a rise in property transaction volumes and better economic confidence. Expectations are solid, although the high cost of living, geopolitical developments and a resurgence in inflation may have the potential to spoil the party. For specialist lenders who’ve spent recent years building capability and credibility, 2026 looks like a year to capitalise if not across the board, then at least in better-performing pockets.
“The next 12–24 months should bring real growth – for New Zealand, the non-bank industry and ourselves – and we look forward to supporting advisers and their businesses as that occurs,” says Rolls.
Published 16 Feb 2026
57%
Oct 2024
Nov 2025
Feel locked out of the property market
63%
46%
Given up hope of owning a home
47%
45%
Interest rates easing makes ownership look more likely than a year ago
43%
Source: State of Home Ownership 2025 Survey Report (Kiwibank)
Aspirations around buying a home
35%
58%
Oct 2024
Nov 2025
High cost of living
Biggest challenges to buying a first home
59%
17%
High house prices
44%
17%
Ability to save for deposit
Low wages
High interest rates
Competing with property investors
Access to mortgage lending/credit
Government policies
33%
11%
24%
60%
57%
17%
45%
16%
38%
9%
Source: State of Home Ownership 2025 Survey Report (Kiwibank)
*Up to three answers possible
“There is … ample room for growth, and we believe specialist lenders that adopt fintech and other customer-focus tools will only add to this potential”
Daniel McGrath,
Xceda
“There’s been a couple of clear changes in the market from our perspective. The first is smaller mortgage sizes generally – driven by affordability pressures and the higher interest rates of recent years”
Craig Rolls,
Basecorp
“People are adjusting expectations – smaller homes, different locations or shared ownership structures are becoming more common. We’re seeing borrowers take a more strategic approach: tidying up debt, restructuring income and planning earlier”
Campbell Smith,
Pepper Money
“We are seeing experienced investors and developers become more tactical and ready to move quickly when opportunities arise”
Phil Bennett,
First Mortgage Trust
“We are starting to see some positive movement in the New Zealand housing market, with modest growth in refinancing, first home buyers and investors returning to the market. This means opportunities across the entire ecosystem”
Ian Boyce,
Avanti Finance
Campbell Smith
Pepper Money
Craig Rolls
Basecorp
Daniel McGrath
Xceda
Ian Boyce
Avanti Finance
Phil Bennett
First Mortgage Trust
Industry experts
As property confidence turns a corner, specialist lenders are stepping up with faster approvals, flexible structures and closer adviser partnerships, turning complex borrower needs into growth
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Campbell Smith is the country head for Pepper Money New Zealand. With over 20 years’ experience in the banking and financial services industry, Smith has substantial executive leadership, financial and operational experience, having worked in various commercial functions across mortgages and asset finance. Smith joins us most recently from LeasePlan as director and country manager, also having worked at Turners Automotive Westpac.
Pepper Money
Campbell Smith
Craig Rolls is a director of Basecorp and the head of lending. Rolls has been with the business for almost 27 years and is an experienced lender well known to advisers in the industry.
Basecorp
Craig Rolls
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 with 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
Ian Boyce has over 35 years of experience in financial services, banking and insurance. He has held several senior leadership roles at ASB Bank, driving growth, profitability and strategic initiatives. Since joining Avanti Finance as general manager, property in 2022, Boyce has led one of the industry’s largest and award-winning property lending teams. Avanti Property Lending has made significant contributions consistently to Avanti Finance Group’s rapid growth, particularly in New Zealand’s highly competitive property market.
Avanti Finance
Ian Boyce
Phil Bennett is head of lending at 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
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Xceda is a non-bank deposit taker licensed and regulated by the Reserve Bank of New Zealand, with a history dating back to 1989. Originally established in Whakatāne as a regional asset lender, Xceda has grown into a nationwide operation offering tailored lending solutions, including short-term bridging finance and long-term property loans. Being one of only a small number of Reserve Bank-licensed institutions reflects our strong regulatory standing and commitment to responsible lending. With more than three decades of experience and a focus on personalised service, Xceda helps New Zealanders achieve their financial goals with confidence.
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First Mortgage Trust (FMT) is an investment fund manager specialising in property finance. For 30 years, FMT has been helping New Zealanders protect and grow their wealth by providing consistent investment returns. Today, the company has over $2 billion in funds under management and more than 7,500 investors nationwide. FMT also provides mortgage advisers and clients with tailored property finance through first mortgages across the residential, commercial, industrial, construction and development 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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Basecorp Finance is a New Zealand owned non-bank lender offering flexible first mortgage solutions since 1997. We specialise in all types of first mortgage lending, including short-term bridging, long-term home loans and finance for commercial property and vacant land. We source loans through adviser networks, with fast approvals within 24–48 hours, risk-based pricing and an experienced underwriting team. Our diversified funding base supports sustainable growth, a book above $1.2 billion and continued reliable adviser support across New Zealand.
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Proudly Kiwi founded and owned, Avanti Finance is an award-winning specialist lender that has helped New Zealanders achieve their financial goals for over 36 years. We offer a broad range of tailored lending solutions – including long-term first mortgages, short-term bridging, property investment, property development and commercial property lending, as well as auto, personal and business loans – through our trusted introducers network. As a progressive introducer-led business, we’re built to back people, move lending forward and deliver the best possible outcome for both our introducers and their clients.
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Pepper Money is Australia and New Zealand’s leading non-bank lender. It was established in 2000 as a specialist residential home loan lender in Australia with a focus on providing innovative home loan solutions to customers that 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
Interest rates may have eased, but for many New Zealanders the gap between what banks will fund and what borrowers need still feels unbridgeable. Into that space, specialist lenders have been building fast, pairing 24-hour turnaround times with tailored structures that can keep a purchase, refinance or development from slipping away at the last minute.
How are non-banks and specialist lenders turning that gap into a growth engine? By scaling up in response to more complex borrower profiles, using speed and regulatory flexibility to support time-sensitive deals and deepening their partnerships with advisers. Sector leaders reveal who is turning to specialist lending, how providers are balancing opportunity with risk and why a sector that still accounts for only a small share of total lending sees 2026 as a year to build on that momentum.
Specialist lenders have a lower profile than banks, but many are currently experiencing their strongest growth in years, filling a gap between bank appetite and borrower need.
“We’re feeling positive about what we are seeing out there, with clear improvements economy-wide in business confidence, REINZ and GDP data, and a lower OCR that is assisting with non-bank and floating rate demand,” says Craig Rolls, director of Basecorp and head of lending. “Overall, we had a good 2025 despite strong bank competition with aggregate book growth resuming.”
Non-banks and specialist lenders continue to play an increasingly important role in New Zealand’s mortgage and finance landscape as the market changes.
“As borrower needs become more diverse and financial situations more complex, non-bank lenders are stepping in with flexible, tailored solutions that traditional lenders may not be structured to provide,” says Pepper Money New Zealand country head Campbell Smith. “In 2026, we’re seeing even stronger consumer preference for third-party advice and access to finance. That shift is accelerating innovation and competition, and it’s helping create a more inclusive lending ecosystem where more New Zealanders can find pathways that genuinely suit their circumstances.”
Other non-banks also see momentum growing, with stabilising interest rates flowing through to more activity and renewed confidence across the housing ecosystem.
“With interest rates at or near the bottom of the current cycle, we are starting to see some positive movement in the New Zealand housing market, with modest growth in refinancing, first home buyers and investors returning to the market. This means opportunities across the entire ecosystem for both main banks and specialist lenders,” says Avanti Finance general manager property Ian Boyce.
“Specialist lenders are well positioned to capture these growth opportunities through niche positioning and strong adviser partnerships, particularly in supporting more complex and non-standard lending scenarios.”
Daniel McGrath, chief executive of Xceda, says the past two years have created conditions that are driving borrowers towards specialist options.
“The last 24 months has been a complex economic environment,” he explains. “We have experienced elevated interest rates in 2024, which then began to sharply decline in 2025. We also had significant cost of living pressures on households and an uncertain economic situation for businesses. These factors have increased demand for specialist lending.”
Specialist lenders are incrementally able to take advantage of subtle environmental changes and expand their areas of business.
“Although the banks still provide the bulk of the mortgage lending, there are situations where their products, credit risk parameters and processing time frames make access to mortgage funding challenging for some customers,” he says.
McGrath points to regulatory changes that have reshaped the economics of specialist lending for deposit-taking institutions.
“From a regulatory perspective, for RBNZ licensed deposit takers such as Xceda, the introduction in 2025 of the deposit compensation scheme has significantly reduced our cost of funding. Therefore, being a specialist lender with funding sourced from protected deposits creates an ideal position for us to offer competitive lending with greater scale and quality in our customer base,” says McGrath.
The 24-hour advantage In a market where timing can make or break a deal, speed has become the specialist lender’s most powerful weapon. While major banks grapple with higher activity levels and increasingly complex approval processes, non-bank lenders are building their value proposition around certainty and pace. Smith says the shift towards more diverse solutions is closely linked to this intense focus on execution and service.
“We’ve always focused on providing choice and flexibility for customers who sit outside mainstream lending criteria. That hasn’t changed – but advisers’ expectations have evolved,” says Smith. “Speed, flexibility and transparency remain essential, but advisers now also expect a deeper partnership. They want lenders who can help them navigate a more dynamic regulatory and economic environment, and who can support them with insights, tools and education.”
This is where non-banks outshine traditional lenders.
“Our short- and long-term product approvals can be delivered within 24 hours, through all cycles,” says Rolls. “And as bank approval times have lengthened, with higher activity levels and some of the refinance ‘specials’ in market, that service proposition will always appeal and be needed.”
The appeal extends beyond mere convenience. For advisers working with complex client scenarios, the ability to move quickly on time-sensitive opportunities – mortgagee sales, deceased estates, off-market properties – has become a competitive necessity.
“We are seeing experienced investors and developers become more tactical and ready to move quickly when opportunities arise,” says Phil Bennett, head of lending at First Mortgage Trust (FMT). “Many are targeting time-sensitive transactions, where speed and certainty of funding are critical.”
Helping borrowers know where they stand is key.
“FMT supports these borrowers by providing fast, flexible lending solutions that enable them to act quickly,” says Bennett. “Our focus is on execution and certainty, helping borrowers progress their plans and achieve their goals.”
Specialist lenders are also working to ensure that speed is paired with clarity and sustainable outcomes over the long term.
“Advisers increasingly value a collaborative approach where lenders work alongside them to deliver sustainable outcomes for clients — not just at application or settlement but over the long term,” says Smith.
Beyond the regulatory fence But speed alone doesn’t explain the sector’s growth. Specialist lenders operate in a different regulatory environment – one that can prove liberating for both advisers and borrowers constrained by macroprudential rules.
“Regulation matters too, and while macroprudential standards have eased in recent months, advisers can disregard both DTIs and the LVR speed limits when dealing with us,” says Rolls.
This regulatory flexibility has opened pathways for borrowers who find themselves on the wrong side of bank lending criteria through no fault of their own. The profile is diverse: self-employed business owners, new immigrants with limited New Zealand credit history, multigenerational family groups pooling resources and investors expanding portfolios. Rolls says that breadth is deliberate rather than incidental.
“We see all types of borrowers through advisers and don’t have a particular niche here – any borrower who the bank can’t assist with is potentially a Basecorp customer,” says Rolls. “Whether that’s first home buyers, property traders, self-employed borrowers or investors in either of the residential or commercial spaces, we have a broad-based credit policy for all these situations and are continually looking to expand options for the adviser network.”
Avanti Finance has seen distinct patterns emerge across its lending book over the past 12 months. “The past year has seen a rise in multigenerational lending, high-LVR lending and borrowers seeking debt consolidation solutions to improve their financial situation before entering homeownership,” says Boyce.
McGrath has observed similar diversity in the types of scenarios landing at Xceda’s door.
“We are seeing a broad range of borrowers, but common scenarios include property owners navigating sale-and-purchase timing mismatches, investors looking to buy a property outside of their main bank portfolio, borrowers who are temporarily outside mainstream credit criteria due to income complexity, and over-age-50 customers looking for equity release loans for varied purposes, for example, to act as the ‘bank of mum and dad’,” says McGrath.
Smith says this focus on inclusion is grounded in real-world experience of how people earn, save and rebuild resilience after financial shocks.
“Consumers remain cautious, and that shapes how they borrow, spend and plan. But within that caution lies opportunity. Non-banks are well positioned to support customers who need flexible, innovative solutions, particularly those who fall just outside traditional lending criteria.”
The changing face of borrowers Multigenerational lending applications have surged as families band together to overcome deposit hurdles. Parents and adult children are jointly purchasing properties, choosing ownership over perpetual renting. The pressure driving these arrangements is evident in the data. According to Kiwibank's 2025 State of Home Ownership survey, 57% of New Zealanders feel locked out of the property market, while 60% cite the high cost of living as the biggest challenge to buying a first home. The ability to save for a deposit remains stubbornly difficult for 45% of would-be buyers.
Rolls is also seeing clear shifts in how borrowers frame their property ambitions and the types of deals coming across advisers’ desks.
“There’s been a couple of clear changes in the market from our perspective. The first is smaller mortgage sizes generally – driven by affordability pressures and the higher interest rates of recent years,” says Rolls. “Some of this has led to an increase in regional loans for us and is part of the reason why Auckland and Wellington have been slower than typical markets.”
Borrowers are also rethinking what getting on the ladder looks like.
“People are adjusting expectations – smaller homes, different locations or shared ownership structures are becoming more common,” says Smith. “We’re seeing borrowers take a more strategic approach: tidying up debt, restructuring income and planning earlier. Our response has been to build more flexible products and work closely with advisers so borrowers can make informed, realistic decisions.”
Meanwhile, self-employed business owners who weathered the economic turbulence of 2025 are emerging with equity release needs – capital for expansion, working capital and development projects. “We’re seeing increased demand from self-employed business owners seeking equity release for working capital, development projects and business expansion,” says Bennett. “Many of these are fundamentally strong businesses that experienced short-term cash flow pressure during the tighter economic conditions of 2025 but remain fully committed to continuing to grow and invest in their communities.”
The developer segment tells its own story about market adaptation. With consumer preferences shifting away from high-density apartment developments towards more liveable, lower-density projects, specialist lenders have provided the flexible capital structures that allow developers to pivot.
“Recently, developers have recognised a shift in homeowner preferences, moving away from high-density, multi-level projects towards fewer, more liveable homes, particularly in Auckland and Canterbury, bringing back a bit of the traditional Kiwi lifestyle,” says Bennett. “Coupled with a reduction in construction costs, these developments are better aligned with current consumer affordability.”
Walking the risk tightrope For all the optimism about growth, specialist lending operates in higher-risk territory than traditional banking. The question of how to balance access with prudence runs through every lending decision, particularly as competition intensifies for quality deals.
“With a lower number of deals in the market, we are hearing of loan applications being spread across multiple specialist lenders,” says Bennett. “This has created increased competition on pricing and fees and terms, as lenders compete to win quality deals.”
Smith agrees that sustainable growth depends on lenders maintaining a strong risk and compliance focus alongside their appetite for innovation.
“Regulation continues to evolve, and that’s something we take seriously. The key is staying proactive – anticipating change rather than reacting to it,” says Smith. “For non-banks, maintaining a competitive edge while remaining compliant means investing in strong governance, robust compliance frameworks and a culture of transparency. When lenders demonstrate that they operate responsibly and with integrity, they build trust with regulators, advisers and customers alike. Ultimately, compliance and competitiveness aren’t opposing forces – they reinforce each other when done well.”
McGrath says that at Xceda, flexibility must be exercised within clear boundaries set by regulatory requirements and industry best practice.
“As a specialist lender where flexibility is our strength, it remains imperative we do so within the parameters of regulation, compliance and best practice. Over the past three years, Xceda has been deeply involved in the consultation process with all regulators, including the Reserve Bank under the new Deposit Takers Act and with the FMA in relation to the new Conduct of Financial Institutions [COFI] legislation,” says McGrath. “Providing products to customers which focus on their tailored needs, transparent disclosure and fair conduct is core to our business.”
FMT’s response has been to double down on governance. In 2025, the firm added a chief risk officer to its senior leadership team and reached a significant milestone: $2 billion in funds under management while delivering returns averaging 230 basis points above 12-month bank term deposit rates.
Basecorp’s strategy centres on combining speed with discipline – maintaining conservative LVR settings while offering flexible credit policies.
“We’ve always sought to combine speed with discipline – 24-hour turnarounds combined with conservative LVR settings, good funds availability and loan applications reviewed by experienced underwriters within a flexible lending policy,” says Rolls.
At Avanti Finance, the balance has involved maintaining strong credit discipline while introducing targeted policy enhancements to give advisers greater flexibility.
“Over the past 12 months, we’ve focused on maintaining our strong credit discipline while enhancing access to lending where it’s appropriate,” says Boyce. “As the economy recovers and property market activity gradually picks up, we’ve introduced a series of targeted policy enhancements to give advisers greater flexibility without compromising prudent risk management.”
The four per cent opportunity Despite recent growth, specialist lending remains a small slice of New Zealand’s total lending market, with housing specialist lending even smaller. New Zealand is often compared with Australia in terms of latent potential, where the share of specialist lending is higher. Boyce sees the trans-Tasman gap as an opportunity driven by increasing borrower complexity.
“Specialist lending currently accounts for around 4% of New Zealand’s total lending market, compared with approximately 7% in Australia,” says Boyce. “The gap highlights clear growth opportunities for the specialist lending sector as borrower profiles become more complex and increasingly require fit-for-purpose solutions to meet their unique needs.”
McGrath agrees on the potential for expansion. Given the above figures for New Zealand and Australia, he adds that “there is therefore ample room for growth, and we believe specialist lenders that adopt fintech and other customer-focus tools will only add to this potential.”
Smith says those opportunities will only be realised if lenders and advisers continue to work together to raise awareness and confidence in non-bank options.
“Banks will always be the backbone of the market, but non banks are increasingly the pressure valve, stepping in where traditional criteria fall short,” says Smith. “Advisers play a critical role in that education process. The collaboration between advisers and non-bank lenders is essential to raising awareness of the value non-banks bring and ensuring customers feel informed and supported. At Pepper Money, we’ve continued to invest heavily in adviser education – through our Quarterly Insights, our ongoing training webinars and our digital tools that make non-bank lending easier to understand and easier to access. The more we lift awareness of non-bank solutions, the more opportunities advisers have to help customers achieve their goals.”
This growth trajectory depends heavily on the adviser channel. As borrower situations become more complex, advisers equipped with deep knowledge of specialist lending options will be best positioned to serve their clients.
“As more borrowers turn to advisers for personalised advice, those who embrace specialist lending will be best positioned to capture growth and serve a broad range of customers,” says Boyce.
McGrath sees the relationship between specialist lenders, banks and advisers continuing to evolve as each plays to their strengths.
“Specialist lenders will continue to play an important role alongside the main banking system, providing structured mortgage solutions where flexibility, timing or complexity require a more tailored approach. Advisers are increasingly critical to this process, helping borrowers understand which pathway is appropriate and when,” says McGrath.
FMT has invested heavily in this relationship, maintaining what it claims is the largest team of business development managers in the specialist lending space, with regional coverage and dedicated construction and development expertise.
“We expect specialist lending to continue to grow, following trends seen overseas,” says Bennett. “As this part of the market expands, it’s important that advisers have a strong understanding of the specialist lenders available to them, so when a deal lands on their desk, they can place it confidently and support their clients effectively.”
The year ahead Looking forward to 2026, specialist lenders are preparing for expansion on multiple fronts. Product innovation, geographical reach and deeper adviser partnerships feature prominently in strategic planning. Boyce expects the sector to continue expanding and diversifying, with innovation playing a key role.
“We expect the specialist lending sector to continue expanding and diversifying, driven by broader product offerings and ongoing innovation to improve speed, efficiency and customer and adviser experiences,” says Boyce. “At Avanti Finance, we’ve invested heavily in these areas and will continue to do so.”
Avanti Finance is launching a new long-term commercial lending product to complement its existing suite of products, which spans first mortgages, bridging finance, caveat secured loans, unsecured personal loans, property investment and development loans.
“We’re kicking off 2026 with the launch of our new Commercial Property Loan product, designed to make funding more accessible for customers investing in properties for commercial use,” says Boyce.
Boyce says the goal of this investment is to support the adviser community as much as end-borrowers. “Ultimately, we’re in the business of helping advisers grow their business, by backing them with industry leading products, service and experience,” he says.
The growing importance of non-banks in this environment will depend on the extent to which the sector can help advisers support clients through continued uncertainty.
“In 2026, the sector continues to navigate a mix of global uncertainty, potential domestic policy changes and the lingering effects of several challenging economic years. While interest rates have eased, many households are still rebuilding financial resilience and confidence is improving but not yet fully restored,” says Smith. “The partnership between advisers and non-bank lenders remains central to delivering growth, supporting customers and strengthening the broader financial system.”
FMT has created another new role – strategic partnership manager – dedicated to strengthening relationships with aggregators and brokers, recognising that education and support will prove decisive as the sector expands.
“Our focus over the next 12–24 months will be on education, strong relationships and practical tools that help advisers place deals with confidence and achieve the best outcomes for their clients,” says Bennett.
The broader industry context adds urgency to these preparations. Advisers are facing pressure to find new income streams and expand their service offerings.
“With another bank removing trail commission, we expect advisers to continue diversifying their income streams and expanding the range of lending solutions they offer to clients,” says Bennett. “As a result, specialist lending is likely to play a bigger role as advisers look for ways to better support borrowers and build more resilient businesses.”
For Basecorp, the focus remains on consistency: maintaining diversified funding, tweaking lending policies to match market developments and delivering reliable service to the adviser network.
“For us, the priorities are to maintain diversified and significant funding to support that growth, tweak our lending policy further to cater for market developments and support the adviser channel, and maintain consistency in our approach, risk settings and pricing,” says Rolls.
The sentiment across the sector is cautiously bullish.
“We expect to see continued growth in the specialist mortgage market,” says McGrath.
Interest rates look to have entered a period of relative stability, and the certainty that brings could herald a rise in property transaction volumes and better economic confidence. Expectations are solid, although the high cost of living, geopolitical developments and a resurgence in inflation may have the potential to spoil the party. For specialist lenders who’ve spent recent years building capability and credibility, 2026 looks like a year to capitalise if not across the board, then at least in better-performing pockets.
“The next 12–24 months should bring real growth – for New Zealand, the non-bank industry and ourselves – and we look forward to supporting advisers and their businesses as that occurs,” says Rolls.
Published 16 Feb 2026
57%
Oct 2024
Nov 2025
Feel locked out of the property market
63%
46%
Given up hope of owning a home
47%
45%
Interest rates easing makes ownership look more likely than a year ago
43%
Source: State of Home Ownership 2025 Survey Report (Kiwibank)
Aspirations around buying a home
35%
58%
Oct 2024
Nov 2025
High cost of living
Biggest challenges to buying a first home
59%
17%
High house prices
44%
17%
Ability to save for deposit
Low wages
High interest rates
Competing with property investors
Access to mortgage lending/credit
Government policies
33%
11%
24%
60%
57%
17%
45%
16%
38%
9%
Source: State of Home Ownership 2025 Survey Report (Kiwibank)
*Up to three answers possible
“There is … ample room for growth, and we believe specialist lenders that adopt fintech and other customer-focus tools will only add to this potential”
Daniel McGrath,
Xceda
“There’s been a couple of clear changes in the market from our perspective. The first is smaller mortgage sizes generally – driven by affordability pressures and the higher interest rates of recent years”
Craig Rolls,
Basecorp
“People are adjusting expectations – smaller homes, different locations or shared ownership structures are becoming more common. We’re seeing borrowers take a more strategic approach: tidying up debt, restructuring income and planning earlier”
Campbell Smith,
Pepper Money
“We are seeing experienced investors and developers become more tactical and ready to move quickly when opportunities arise”
Phil Bennett,
First Mortgage Trust
“We are starting to see some positive movement in the New Zealand housing market, with modest growth in refinancing, first home buyers and investors returning to the market. This means opportunities across the entire ecosystem”
Ian Boyce,
Avanti Finance
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Campbell Smith
Pepper Money
Craig Rolls
Basecorp
Daniel McGrath
Xceda
Ian Boyce
Avanti Finance
Phil Bennett
First Mortgage Trust
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As property confidence turns a corner, specialist lenders are stepping up with faster approvals, flexible structures and closer adviser partnerships, turning complex borrower needs into growth
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Campbell Smith is the country head for Pepper Money New Zealand. With over 20 years’ experience in the banking and financial services industry, Smith has substantial executive leadership, financial and operational experience, having worked in various commercial functions across mortgages and asset finance. Smith joins us most recently from LeasePlan as director and country manager, also having worked at Turners Automotive Westpac.
Pepper Money
Campbell Smith
Craig Rolls is a director of Basecorp and the head of lending. Rolls has been with the business for almost 27 years and is an experienced lender well known to advisers in the industry.
Basecorp
Craig Rolls
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 with 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
Ian Boyce has over 35 years of experience in financial services, banking and insurance. He has held several senior leadership roles at ASB Bank, driving growth, profitability and strategic initiatives. Since joining Avanti Finance as general manager, property in 2022, Boyce has led one of the industry’s largest and award-winning property lending teams. Avanti Property Lending has made significant contributions consistently to Avanti Finance Group’s rapid growth, particularly in New Zealand’s highly competitive property market.
Avanti Finance
Ian Boyce
Phil Bennett is head of lending at 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