Mortgage Broker Says Competition Returning To Market For Home Loans

Post by NeilMc on April 8, 2010 · Under Australian Economy, Business News, Company News, banking, home loans, interest rates, mortgages · Comment 

Australia’s largest mortgage brokers says that Australians are increasingly ditching major banks and refinancing their mortgages with smaller regional lenders as competition in the mortgage lending market returns.

Australia Finance Group says refinancing has hit an all time high of 37.2 per cent of all mortgages it arranged.

According the results of the latest index compiled by the mortgage broker, the major banks and their subsidiaries share of the home loan market has fallen to 82 per cent in March, compared to 91 per cent during the same time period in the previous year.

Mark Hewitt, AFG’s general manager, says that Australian borrowers were increasingly price conscious and are actively seeking better deals, now that competition has returned and the economy has recovered.

“We went through a period where there were very few alternatives for borrowers as the second tier, or the banks outside the majors, had funding restrictions brought on by the GFC, which meant they weren’t really in the market to lend. That is freeing up somewhat . . . so we are seeing them come into the market with some quite competitive offers on price and product features.” Mr. Hewitt said.

Lenders from the second tier such as ING, Suncorp and AMP have staged a comeback following a flight to perceived quality during the financial crisis, resulted in the major banks growing their market share as rivals struggled to obtain finance.

“Now that we appear to be past that trouble and things have freed up again, competition opens up again and people are feeling much more confident about dealing with groups outside the big four,” Mr Hewitt said.


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