The credit union is not a registered bank and is exempt from the Reserve Bank's LVR restrictions. It has chosen to increase its self-imposed LVR restriction from 90 per cent to 95 per cent.
NZCU has also chosen to raise its lending cap from $400,000 to $600,000.
The credit union's bold move comes as non-banks seize the initiative and ramp up lending, as banks retrench from the market. Advisers have noted the major lenders have begun to make it more difficult for borrowers with stricter servicing tests and internal limits on lending.
Non-bank lenders including Bluestone and RESIMAC have accelerated efforts to win business from the big banks. Non-banks lent $2.2 billion in mortgage loans in April, compared to $1.8 billion in April 2017 and $1.4 billion in April 2016.
The credit union has about 30,000 home and personal loan customers across its branch and online network. The company recently revamped its online banking system to help its efforts to win new customers.
NZCU said its decision to loosen LVR and fee cap is designed to lure first-time buyers who may struggle to get on the property ladder. NZCU's marketing manager Melissa Abraham-Smith says: "The Baywide home lending story has always been about helping first home buyers. We are incredibly proud to have helped thousands of Kiwis achieve that first step on the property ladder. To keep the dream alive we have increased our LVR limit to 95% and our lending cap to $600,000."
