Home loan competition hits all-time low

Font size :

Australia’s big banks wrote 92.5% of all housing finance in May – the highest figure ever recorded since the Australian Bureau of Statistics started tracking mortgage lending figures in 1992. 

 

The increase in market share largely comes at the expense of the non-bank market, which wrote 1.2% of mortgages in May – a significant drop from 2003 when it peaked at 15.2%.

 

Mutuals collectively wrote 6.3% in May – 4.3% of which was written by credit unions, while building societies wrote 2.0%. Almost two decades ago, mutuals were writing 10.2% of new home loans.

 

The drop in non-bank lending is a bullet to competition, according to the nation’s peak industry body for mortgage brokers.

 

The Mortgage & Finance Association of Australia indicated that bank dominance means higher interest rates for home loan customers. The standard variable rate average for the four major banks in May was 7.79%, while for credit unions the SVR average was 7.32% and non-banks it was 7.01%.

 

“The figures tell us that the non-bank lenders are the most competitive when it comes to interest rates, yet they are being squeezed out of the market,” said MFAA CEO Phil Naylor.

 

Naylor called on the government to take a closer look at the Canadian model which guarantees competitively priced funding pools accessible by non-bank lenders.

 

 

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Sep 20, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords