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Market share improves for non-bank lenders

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Smart Home Loan

The Smart Home Loan is our super-low rate loan that will save you money on interest and fees.

  • 4.23%
    variable rate p.a.**
  • 4.25%
    comparison rate p.a.*

Non-bank lenders are snagging a bigger portion of the mortgage market, as more Aussies turn away from the big banks.

According to mortgage aggregator FAST, the major banks conceded market share to non-bank, neobank and fintech challengers in 2019.

Lenders owned by the big four banks saw their market share slide from 77% to 67%, while non-major lenders increased by 42.4% year-on-year to $1.77 billion.

As a whole, bank lenders saw a 6% fall in market share while non-bank lenders more than doubled their share from 5% to 11% of the market.

Read: The Year of the Non-Bank Lender (mariemortimer.com)

KPMG analysis also found the major bank’s market share of residential mortgages fell by nearly 100 basis points to 81.2% in 2019 as subdued lending conditions and competition put the squeeze on.

According to the analysis, the major banks' application volumes for home loans were impacted by changes in response to the Financial Services Royal Commission, with the process of borrowing becoming slower and “more onerous” thanks to tightened lending requirements.

“The changing competitor landscape, including the rise of international banks, challenger banks and non-bank lenders, is continuing to take residential mortgage market share out of the majors,” the report said.

Furthermore, the non-bank lending sector has grown by 15% annually, according to the Reserve Bank’s April 2019 Financial Stability Review.

The RBA cited greater speed and the increased likelihood of loan approval as the two biggest factors behind the rise in non-bank lending.

Why go with a non-bank lender?

Competitive rates

Non-banks, like loans.com.au, don’t have the same corporate structure and number of branches that banks do, which means we can pass on these savings through lower interest rates on our loan products. In fact, a number of the lowest home loan rates on the market belong to non-bank lenders. Savings for borrowers can also come in the form of lower fees.

Personalised service

Big banks have millions of customers around the country but many non-banks don’t, meaning they can offer faster, more personalised customer service. At loans.com.au, you’ll speak to a real person, rather than an automated phone system, which can make your application process faster and easier.

Evolving technology

Some non-bank lenders are online-only, meaning we’ve got some pretty user-friendly apps to manage your mortgage. Loans.com.au’s onTrack app allows users to quickly manage their home loan through to approval and settlement.

If you want to see how a non-bank lender could help you get a competitive home loan, give our expert lending specialists a call. 

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About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.