AFG Competition Index – November 2014

1 in 3 home loan borrowers refinance with non-major lenders

34% of borrowers who refinanced their home loans last month did so using a non-major lender according to AFG, Australia’s largest mortgage broker. AFG’s quarterly Competition Index shows that non-major lenders are strongest among borrowers seeking to refinance (as opposed to other borrower types – investors, first home buyers and upgraders).

Across all categories of borrowers, non-major lenders collectively accounted for 28.3% of all new mortgages processed. This is the highest such figure for non-major lenders since AFG began recording competition figures at the start of 2012 (Tables 1 & 2).

Suncorp had the biggest share of refinancers among non-major lenders, accounting for 10.3% of all home loans in this category. Suncorp’s 10.3% figure compares with 8.8% for Westpac in the same month. Macquarie Bank was the second largest in the category in October, delivering 7.5% of all refinancing home loans (Tables 5 & 6).

Mark Hewitt, General Manager of Sales and Operations says: ‘It is very encouraging from a competition perspective to see borrowers more and more willing to explore alternatives. Suncorp are a great example of this. Traditionally they have struggled outside their home state of Queensland however through delivering on a combination of customer value and service they have reached an all-time market share high of 8.2%’ The AFG Competition Index shows that, overall, major lenders accounted for 71.7% of all new home loans in October. Most notable in a period where overall major lender share fell was ANZ increasing its share to 17.6%, displacing CBA as the number one brand on the AFG panel.

Among non-major lenders Suncorp had the largest share in October on 8.2%, with Macquarie on 5.1%, ING on 3.1% and Bank of Queensland (BOQ) on 2.6%.

The AFG Competition Index shows that NAB’s repositioning of its broker-distributed Homeside brand, renamed NAB Broker in August, has benefited its share, which grew from 8.8% at the end of the last quarter to 9.8% in October.

The first home buyers market continues to be more fragmented, with major lenders accounting for 69.1% of all loans. The largest non-major lender, Keystart (10.3%) is WA Government-backed, with BOQ the largest commercial lender on 6.0% and Suncorp the next largest on 4.7%.

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