Non-major banks grabbing home loan refinancers

Adam Smith 15 September 2016

house piggy bank moneyRefinancers are looking outside the major banks following the RBA’s August rate cut, new figures show.

The monthly AFG Competition Index seen non-major banks lift their share of the refinancing market from 31% to 36% over the last quarter. AFG manager of sales and operations Mark Hewitt said ING DIRECT has seen the biggest increase, lifting their refinancing market share from 3.1% to 7.8%.

“In terms of overall mortgage sales, ING are at a 12 month high on 5.2% of the non-major market. This is at the expense of Suncorp, who are now sitting at 1.8% after a peak of 7.6% of the non-major market back in March of this year,” Hewitt said.

Hewitt suggested that refinancers were looking beyond the major banks following their decision in August to pass on only a portion of the Reserve Bank’s 25 basis point cut. Majors still dominated the market, however, with fierce competition for investors.

Commonwealth Bank led the market for investment lending at 19%, with ANZ at 15.7% and Westpac lifting their share to 15.2%.

“Westpac also cemented their position as the lender of choice for first home buyers. They now fund nearly 24% of all first home buyer loans,” Hewitt said.

Collectively, major banks accounted for 72.2% of all home lending for August, AFG said. While non-major lenders increased their market share for refinancing, their overall market share fell slightly, from 28.7% in July to 27.8% in August.

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