As borrower demographics evolve, mortgage advisers say lenders are increasingly adapting products to meet more complex financial circumstances and changing life stages
As borrower demographics evolve, mortgage advisers say lenders are increasingly adapting products to meet more complex financial circumstances and changing life stages.
New Zealand's mortgage market is becoming increasingly diverse, and with it, the role of the mortgage adviser is evolving.
So for advisers, success is no longer just about finding the sharpest interest rate. It's about understanding increasingly complex client circumstances and matching borrowers with products that fit not only today's needs, but their long-term goals.
Today's mortgage borrowers bring more complex financial lives – and advisers are adapting
Nicole Drought (pictured, right), director and financial adviser at Nexus Financial Advisory, says the days of the ‘standard’ mortgage application are becoming increasingly rare.
"Clients are coming to us with blended families, multiple income streams, student debt, side hustles, overseas assets, new visa situations, and retirement plans that still involve debt.
“The traditional PAYE borrower with a 20% deposit is becoming less common, and advisers are having to think far more strategically about how lending is structured."
The rise of multi-generational home ownership is one example. Parents are increasingly helping adult children into the market, not only as guarantors, but as co-borrowers and co-owners.
And while affordability remains a major driver, Drought says these arrangements often benefit both generations, providing housing security for ageing parents while helping younger families overcome today's affordability barriers.
“However, these structures also require advisers to have broader conversations around ownership, succession planning, estate planning and long-term exit strategies,” says Drought.
Digital-first and financially savvy - how Gen Z is reshaping the mortgage journey
The newest generation of home buyers is also changing the way advisers engage with clients. According to Drought, Gen Z borrowers often arrive with a solid understanding of mortgage concepts after researching online and consuming financial content across social media.
"Gen Z borrowers are probably the most financially educated generation we've seen entering the market, but they are also facing the greatest affordability challenges.
“The conversation has shifted from buying a 'dream home' to simply finding a realistic and sustainable pathway into home ownership."
April Hastlow (pictured, left), director and financial adviser at Factor Financial, is seeing similar trends.
"Personally I'm seeing less appetite for big renovations or doer-uppers. They tend to prefer newer stock that takes less time and effort to make their own. There's also more awareness about the kinds of mortgages and facilities available.”
Deposit strategies are evolving too. While some younger buyers continue to receive family support, Hastlow says many are entering the market with 10% deposits built largely through KiwiSaver, and a determination to get in now and start paying it down, rather than wait, keep saving, and risk house prices rising faster than they can keep up with. Others are purchasing alongside siblings or friends to overcome affordability challenges.
"On expectations, they're far more digital. They want speed, transparency, and the numbers up front, they shop around hard, and they carry much less loyalty to a single main bank than older buyers,” says Hastlow.
For advisers, these clients expect a seamless digital experience, but they also value strategic guidance that goes beyond what online calculators and AI tools can provide. Drought believes technology should strengthen – not replace – the adviser relationship.
"The future of financial advice is not advisers competing with AI, it's advisers working alongside it. AI helps clients ask better questions, while experienced advisers help them make informed decisions."
Migrant borrowers bring opportunity – but lender policies can create barriers
Migration also remains a significant influence on New Zealand's mortgage market, with many migrant borrowers arriving with strong incomes and healthy savings. But they also face hurdles around visa requirements, overseas assets, foreign liabilities and limited New Zealand credit histories.
As Drought explains, a borrower may be financially strong, but if a lender cannot easily verify overseas information within existing lending policy, unnecessary barriers can emerge.
Hastlow says navigating lender policy has become one of the adviser's most valuable skills.
"Banks deal with offshore income and debt so differently, and it becomes a real exercise in fitting a client to the bank whose policy suits them best.
“Because appetite for specific visa types and income structures changes constantly, knowing where each client actually fits is most of the job."
She adds that while some of the main banks have staff who specialise in migrant and overseas-buyer lending and will look at overseas credit and employment history, they stay cautious, so non-banks often fill the gaps at a higher rate.
From side hustles to self-employment, lenders are catching up with today's workforce
As borrower profiles become more diverse, lenders are adapting the products they offer. And borrowers with non-traditional income streams are increasingly looking for lending solutions that recognise modern working patterns.
"More borrowers now earn income through contracting, self-employment, multiple jobs, overtime, bonuses, rental income, boarder income, or side businesses,” says Drought.
“And while mainstream banks have become more flexible over recent years, they still generally favour simple, predictable income. This is where specialist knowledge becomes critical."
Hastlow agrees the landscape has shifted considerably.
"The non-bank space has really stepped up here. There are good low-doc options now for people who are newly self-employed and don't yet have a couple of years of accounts behind them. Some lenders will assess the actual rate a client is paying rather than a higher test rate and that flexibility makes a genuine difference.
“That said, it's honestly one of the spaces I've seen the biggest positive change with the banks too, in how they capture overtime, commissions, casual work, and multiple income streams.
“Projections are being used more, and I find the business banking teams much easier to work with than I used to.”
The result is a broader range of options for borrowers who may once have struggled to meet traditional lending criteria, provided advisers know where to look.
Asset-rich but income-light – the changing needs of New Zealand's ageing borrowers
While much attention is given to first-home buyers, advisers say New Zealand’s ageing population means there are different types of conversations to be had with the retiree and pre-retiree market.
"We're seeing more clients looking to downsize, assist children into the property market, renovate existing homes, or manage debt into retirement. Others are asset-rich but cashflow-conscious," says Drought.
“Products such as bridging finance, equity release and retirement lending are becoming more relevant as advisers balance current affordability with long-term financial security.”
And Hastlow is seeing the same trend.
"There's a real shift here. More people are carrying a mortgage into or near retirement, and plenty are asset-rich but income-light, which is exactly the profile that struggles against standard servicing and DTI (debt-to-income) tests."
Rather than focusing solely on today's transaction, she believes advisers need to structure lending around where clients want to be years into the future.
Flexibility is becoming the defining feature of today's mortgage products
Across every demographic, flexibility has become one of the most sought-after features in a mortgage, with Drought saying that borrowers no longer expect their mortgage to remain unchanged over a 30-year term – "They want products that evolve alongside their lives."
Forward planning has become an increasingly valuable part of the advice process, particularly as lending rules continue to evolve, with Hastlow saying that advisers need to think carefully about loan structure from day one.
"Offset accounts and revolving credit, so funds can sit against the lending but still be redrawn without a full new application, are huge, and they're especially valuable for self-employed clients with lumpy cashflow.
“So is keeping future goals in mind when it comes to how long you lock in loans, the facility types you choose, and what property carries what lending, all to maximise choice in the future and minimise friction and potential charges."
As borrower needs become more complex, the value of advice continues to grow
Ultimately, Drought believes the biggest change isn't actually about demographics – it's about behaviour.
"Mortgage advice is no longer simply about securing the lowest interest rate. It's about understanding people, structuring lending appropriately, navigating increasingly complex lender policies, and building long-term financial strategies."
Hastlow echoes that sentiment, saying advisers should be focused on helping clients achieve not just today's property purchase, but tomorrow's financial goals as well.
"With the rules getting more complex on every front, DTI, LVR, the CCCFA changes and the COFI regime, good advice is increasingly about matching the right client to the right lender and planning ahead on deposit, credit, and structure, not just chasing the sharpest rate of the day."
In a market where no two clients look quite the same, tailoring mortgage products to changing demographics is no longer a niche skill – it's becoming one of the profession's defining strengths.
