Brokers turning towards non-banks for client circumstances

An analysis of the latest Broker Pulse: Residential Lending Survey by Agile Market Intelligence has shown that 87 per cent of brokers surveyed cited client circumstances as their primary reason for submitting applications to a non-bank lender in June 2024.

This has revealed the highest proportion of brokers citing client circumstances as a primary reason, up from the previous highs of 83 per cent in May and 81 per cent in April.

This month’s Broker Pulse survey collected responses from 275 residential brokers between 1 and 16 July 2024 to unveil their experiences with lenders during June 2024.

Product pricing as a primary reason also increased in June, up from 29 per cent in May to 34 per cent.

However, the research found that broker usage of non-bank lenders declined during the month, down to 49 per cent from the spike in May of 55 per cent.

Liberty Financial, Advantedge, and Pepper Money were the top three non-banks used by brokers in June, at 13 per cent, 12 per cent, and 10 per cent, respectively.

This was followed by Firstmac at 9 per cent, while La Trobe Financial and AFG Home Loans were tied at 5 per cent.

Majors v non-majors

Usage of the major banks for client circumstances saw a slight decline during June, down to 77 per cent from 78 per cent, while the non-major banks recorded a surge of brokers using them for this category, rising to 66 per cent in June from 52 per cent in May.

The non-major banks also snagged the highest overall usage from brokers at 89 per cent, up from 84 per cent in May, while the major banks saw a decline of 3 percentage points down to 75 per cent from 78 per cent.

Out of the top 10 lenders used by brokers in June, the non-major banks secured five of those spots, with Macquarie Bank topping the list at 46 per cent. ING (34 per cent), Bankwest (25 per cent), St.George Banking Group (24 per cent), and Suncorp (17 per cent) took the fourth, seventh, eighth and ninth spot, respectively.

Additionally, product pricing was top reason for broker usage of the non-majors at 75 per cent, down from 78 per cent in May.

Meanwhile, ANZ took the top spot out of the big four banks in terms of overall usage at 41 per cent, followed by the Commonwealth Bank of Australia (35 per cent), Westpac (32 per cent), and NAB (30 per cent).

Broker Pulse is a monthly performance tracker of residential mortgage lenders. Contributing brokers get access to the report every month to give them a bird’s-eye view of the latest trends to make informed decisions. For more information and to join the community, visit brokerpulse.com.au

[RELATED: Carving a niche: The rise of non-bank lenders]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.