Amidst a competitive mortgage marketplace, home buyers in Australia are spoilt for choice between the rates and discounts offered by smaller lenders.

Non-major lenders score big with mortgage seekers

Recent data by the Australian Finance Group or AFG shows that non-major lenders are picking up a more significant chunk of the mortgage market than ever before as home buyers seeking discounted rates turn to small and medium sized lenders for financing their homes.

According to the AFG Mortgage Index for the last quarter of 2017, the share of the major banks declined to 64.2% of the market while non-major lenders scooped 35.8% of the pie. In 2013, the share of the non-major lenders was limited to 22.9% of the market.

Breaking down the data state wise, in NSW, the major banks accounted for 63.25% of the market while non-majors took 36.75% of the market. In Victoria, major and non-major banks took 66.71% and 33.29% of the market respectively. Non-major lenders were most popular in Queensland, sweeping away 38.33% of the market.

Lower rates, happy customers

Smaller banks are becoming popular due to their competitive pricing. However, they are also offering excellent service to their customers. A Roy Morgan report indicates significant differences between the customer satisfaction levels of major and non-major banks.

According to the report, in December, the six largest banks after the big four recorded higher satisfaction levels for mortgage customers as compared to the majors. Bendigo Bank recorded the highest home-loan customer satisfaction level at 92.1% followed by the Bank of Queensland at 87.0%. In general, the mortgage customers of the non-majors were more satisfied than their non-mortgage customers.

Among the big four banks, the CBA maintained the highest satisfaction level of 79.6%, followed by the NAB (78.6%), ANZ (78.1%) and Westpac (77.9%). However, when talking about home loan customers alone, ANZ recorded the highest home loan customer satisfaction among the big four, scoring 78.0%.

Out of turn rate hikes and tightened criteria around investment lending by the big banks has egged many customers to look for competitive deals elsewhere. Besides, non-major banks are offering much more than ever before to mortgage customers in terms of deals, discounts and better after-sales service, justifying the switch in the market.

Mortgage brokers facilitating the change

Ruth recently switched to a lower rate offered by a bank she hadn’t heard of before. Her broker has suggested the deal, and on researching she found the bank to be quite reputed. “Had I not contacted a broker, I would have probably missed out on the deal that is currently saving me money,” she says.

Like Ruth, many homeowners are turning to brokers to refinance their home loans, pushed by the out of turn rate hikes by the big four.

Most people who have used a broker agree that a good mortgage broker can save you time and money on your journey to home ownership.

(You can get in touch with a mortgage broker online, here.)

Currently, more than 56 percent of new home loans in Australia are arranged through mortgage brokers, and this number is expected to grow in the future. If you are looking for home loan deals, whether fresh or refinancing, you would benefit by understanding the features you need (or do not need) in your home loan and communicating the same to your broker. Your broker would thus be better informed to find you a home loan that is cheaper as well as in line with your requirements.

A mortgage broker would assess your situation before offering you any deals. But, don’t treat that as an excuse to not do your homework. To get the best possible deal for yourself, we suggest that you take time to understand your financial situation and review home loans online before approaching a broker. You can compare broker pre-negotiated home loan rates here.

HashChing is Australia’s first borrower-friendly online marketplace offering hundreds of deals from over 60 lenders you can compare online apart from on-demand broker services on a robust online platform.


By Vidhu Bajaj,
HashChing Content Writer



HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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