Non-banks will take 6 months to lend again

Non bank lenders are starting to lend again with the assistance of the federal government's $8 billion assistance scheme that has allowed them access to finance for retail mortgage lending. Members Equity Bank, Resimac, Challenger and FirstMac have all benefited from the government program and other non-banks are expected to follow. However real competition in the lending market is still some way off says FirstMac managing director Kim Cannon. “The non-bank industry will come back slowly, It is a confidence thing with mums and dads. It could take six months before we are selling mortgages.” Mr Cannon said FirstMac will only be taking on loans with 80 per cent LVRs or lower. Andrew Twyford from Challenger said the major banks were being overly aggressive in their pricing and would be forced to reprice their loans later on.

Source: The Australian Financial Review