Borrowers losing patience with slow turnaround times
Home buyers are increasingly turning to non-bank lenders as traditional banks struggle to meet urgent approval deadlines, according to Pepper Money country head Campbell Smith (pictured).
In New Zealand, traditional banks are facing criticism for prolonged mortgage approval times, with some applications taking up to five weeks to process. This has led to frustration among borrowers and mortgage advisers, who are increasingly turning to non-bank lenders for faster solutions.
In today’s fast-paced property market, Smith said borrowers simply can’t afford to wait.
“At a time when home buyers are often under timing pressures, delays experienced when seeking a finance approval can add unnecessary stress,” he said.
“As a non-bank lender, we see this as a crucial moment to deliver upon our service promise, being – agility, responsiveness, and a relentless focus on customer outcomes.”
Non-bank lenders currently account for just under 3% of total mortgage lending in New Zealand, with housing loan balances sitting at $4.98 billion as of May 2025, according to the Reserve Bank of New Zealand.
Traditional lenders lag behind
With mortgage approval turnaround times averaging around 10 business days – and often longer for complex applications – banks are finding it difficult to keep pace. Smith attributes this lag to outdated systems and resourcing issues.
“While banks struggle with internal bottlenecks, staffing shortages, and legacy processes, we’ve built our model around streamlined approvals, flexible assessments, and real-time decision-making,” he said.
“Our partners and advisers tell us the same thing: when deadlines are tight, they turn to us. Why? Because when an adviser and their client turn to us, they’re not looking for excuses. Because when people need answers, they shouldn’t be left waiting.”
Built for agility, not scale
Smith said the real difference lies in how non-banks are structured.
“Banks are built for scale. We’re built for agility,” he said. “That means we combine smart tech with experienced credit teams who understand nuance. We’ve eliminated unnecessary forms and duplication to keep things moving.”
Tech-enabled tools give advisers an edge
One of Pepper Money’s most effective tools, according to Smith, is the Pepper Product Selector – a digital solution designed to speed up the client journey.
“Advisers are turning to our Pepper Product Selector to find their clients’ a home loan fit in under five minutes,” he said.
“The client can have an indicative offer, including interest rate, repayment and fee estimate, in a matter of minutes. It’s like an adviser’s digital BDM available 24/7.”
A new benchmark for lending expectations
Smith said the market’s changing pace means borrowers – and advisers – expect more.
“As the market evolves, so must the expectations of what a lender should be. Non-banks like us are not just keeping up, we’re setting the pace.”
