Non-bank lenders disappearing from market

According to new ABS data the non-bank lenders’ market share dropped from 2.7 per cent to 1.2 per cent of Australian mortgages in the last quarter.

In the same period, banks’ share of the $1.2 trillion mortgage market climbed to 91.5 per cent in March, up from 89 per cent in December 2010.

MFAA chief executive Phil Naylor said non-banks were synonymous with bringing competition and lower rates to the mortgage market in the late 1990s, through lenders such as Aussie and Wizard.

“They found ways to lower their interest rates and create incentives for home buyers to borrow from them. Mortgage margins across the entire market decreased with the influence of lenders like Aussie and Wizard.”

“To see the non-banks falling to almost one per cent of market share is worrying from a competition point of view.”

Source: The Advisor