Banks still hold the cheapest money in town. But they have also built the tallest walls. Many investors now hit the same barrier: the bank calculator says no, deals stall, and growth slows. The ones still moving forward have worked out how to use non-bank lending.
In APIA’s latest webinar, Kris Pedersen showed real deals where non-bank lenders stepped in. These were practical case studies of investors who got stuck with banks and found another way through.
Staged LVR to get in, then refinance
Example: a duplex bought for $735,000, $80,000 spent on renovations, end value $925,000. A bank capped lending at 70 percent LVR. A non-bank funded at 80 percent, sometimes up to 90 percent. Rates were higher for a short time, but once the valuation lifted, the investor refinanced back to a bank. Short-term non-bank money made the deal possible and created long-term equity.
The two step refinance (useful, not guaranteed)
Some banks allow a dollar-for-dollar refinance outside LVR caps even if the debt started with a non-bank. It happens in practice, but it is not a promise. Treat it as a bonus, not the plan. Policy can change.
When serviceability models shut you down
Banks discount rent, test at higher rates on principal and interest, and shorten remaining terms. A portfolio that is cashflow positive can look like a loss on paper. Some non-banks...
