Prominent Auckland mortgage broker John Bolton has launched a peer-to-peer lending platform aimed at matching up savers looking for better returns than they can get from a bank with personal loan borrowers looking for cheaper interest rates than those offered by banks.Bolton, who was previously a general manager of mortgages for ANZ New Zealand, has built up Squirrel Mortgages to become Auckland's largest mortgage broker over the last five years with annual lending of over NZ$800 million. He said Squirrel Mortgages staff spent 18 months building the platform for the new peer to peer lending service, Squirrel Money.Bolton said Squirrel had chosen to build its own bespoke platform based on Microsoft's Azure cloud-based computing network rather than build on top of an 'off the shelf' peer-to-peer platform, as New Zealand's biggest peer-to-peer personal lender Harmoney had done on a US model.Squirrel Money is using a similar model to those used by Zopa and Ratesetter in Britain where a margin is charged and funds are set aside into a reserve fund, from which investors are repaid if a loan defaults. Squirrel Money is calling its reserve fund a "Loan Shield" based on a reserve margin of 4 per cent. Squirrel Money will collect a margin of two per cent and charge establishment fees of NZ$250 for an unsecured loan and NZ$500 for a loan secured as a second mortgage against property.Squirrel Money is promoting returns to savers of six to ten per cent, while it expects loans to cost borrowers between eight per cent and 16 per cent, significantly lower than the 13 to 20 per cent charged by banks. Squirrel will lend between NZ$3000 and NZ$70,000 at terms from two years to five years. Squirrel Money does not allow loans to be split up into small parcels and instead directly connects savers and lenders for complete loans through an auction system and credit scoring system.Bolton told Banking Day Squirrel Money had no plans to launch in the mortgage market and did not see Squirrel Money as a major threat to the big four banks."We're a very small minnow in a very large lake," Bolton said.He said Squirrel would be happy to lend NZ$40 million in its first year, rather than the NZ$140 million that Harmoney lent in its first year. Harmoney is backed by Heartland Bank and New Zealand's largest online marketplace, TradeMe.Bolton said Squirrel Money could look to expand into small business lending, but had no plans to expand into the mortgage market, which was very competitive because of the scale offered by banks."We're not keeping them awake at night at all," he said of a potential mortgage peer-to-peer lending product."There's no margin there unless you've got the sort of scale they've got."Squirrel Money independent directors include former ASB CFO Stewart McRobie, and former AXA NZ and Sentinel CEO Vaughan Underwood.