MFAA: More competition needed
The Mortgage and Finance Association of Australia (MFAA) has spoken out about lenders, suggesting the industry needs more competition in an April 1 statement.
Such an announcement may pique the attention of existing homeowners who want to switch lenders, whether to obtain a better interest rate or get certain features on their mortgage.
More funding, greater competition needed
The MFAA has suggested greater funding for alternative lenders - for instance, online lenders - in its submission to the Financial System Inquiry.
Just one-fifth of the home lending market rests with non-major banks and alternative lenders. The MFAA feels that at the most there is "sporadic competition" while larger lenders hold onto their market share.
The lending industry is failing to see systemic change, a theme that the MFAA drew upon.
The increase of market share among a select few lenders from 58 per cent to 80 per cent since 2006 is "not as a the result of any innovation or competition, but because of the collapse of the securitisation market funding their non-bank competitors, as well as two significant acquisitions", noted the MFAA.
The industry body has said the country's securitisation market needs to be "enhanced".
Furthermore, it's suggested a degree of deregulation may be required. The MFAA has cited regulatory roadblocks as stifling competition.
Removal of these roadblocks could improve the system, potentially resulting in better borrowing outcomes for couples and families looking to upgrade their homes and gain a great mortgage refinance rate.
"The MFAA subscribes to the principle that governments should not intervene in markets unless it can be demonstrated that there is an imbalance in competition, where some regulation might correct," the MFAA stated in its submission.