Majors Loosing Relative Mortgage Share: AFG

Australians are testing the competitiveness of the lending market with  AFG showing the non-major lenders picking up nearly 35% of the market, according to the latest AFG Competition Index. This of course is myopic, in so far as it looks at traffic though the aggregator. But it does confirm that some majors are intentionally slowing business via their third party channels. This phenomenon is one we already discussed on the DFA Blog.

AFG General Manager of Sales and Operations, Mark Hewitt said the data reaffirms the value the mortgage broking channel delivers. “Mortgage brokers deliver true competition in the lending sector and provide real choice for consumers. If a lender is out of the market on service or price they will look beyond the majors to meet the needs of their client.

“Today’s figures show CBA continues to slide with their overall market share down from 20.5% this time last year to 11.8% last month.

“With CBA, AFG believes this is the result of a deliberate strategy to pull back from the investor and interest only markets to meet the lending caps mandated by APRA,” said Mr Hewitt.

“When combined with their subsidiary Bankwest, CBA has dropped their total market share from 25.5% to 15.5% in the same period.

Amongst the other majors, NAB is continuing to win market share.

“NAB have benefited from their recent actions to align their broker products with their direct channels,” he said. “Until recently there was a difference between the products made available to their direct and broker introduced customers which created confusion for borrowers.”

“Westpac has taken the lion’s share of the fixed rate market for the majors, doubling their share from 10.98% this time last year to finish May 2017 with 22% of fixed rate mortgages.

“Westpac subsidiary St George is also picking up market share of those seeking to refinance.

AFG has 39 home loan lenders on its panel and flows of business to the non-majors are significantly higher through brokers than in the broader lending market. Last month 34.95% of all mortgages lodged by AFG brokers went to the non-majors. This is in stark comparison to the 17% market share of the non-majors outside of our channel.

“Suncorp is the big winner for the non-majors, picking up market share in the fixed rate, investor and refinancing categories.

“Increased competition delivers value to the consumer. Many of the non-major lenders on our panel do not have a branch network. Without the competitive tension mortgage brokers bring to the market, prices would inevitably rise,” he concluded.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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