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Mortgage Ezy CEO and co-founder Peter James told Mortgage Business that the banks’ out-of-cycle rate increases, coupled with the new criteria for investment lending, has seen more consumers turn to the non-bank sector.
“I think what’s happening is that customers that were complacent before are now angry with the banks,” Mr James said.
“They’re angry for the out-of-cycle rate increases, they’re angry about the fact that they’re being shut out with new criteria that makes it very difficult to obtain an investment loan and they’re trying to vote with their feet.”
The recent pricing and policy changes implemented by major banks have left investors at a loss, Mr James added.
“If [a consumer] has something organised and one policy changes that’s one thing, but when you’ve got lenders all imposing different policy changes and pricing changes all to different degrees, and separately, it becomes chaotic,” he said.
“The problem that we’ve got is that it’s a shifting landscape continuously and for long-term investments there has to be confidence in long-term policies and there hasn’t been now for six months.”
Mr James said Mortgage Ezy is one of the non-banks that has benefitted from renewed interest in the sector brought on by banks' policy and pricing changes.
“I think now what’s happening is the whole non-bank sector is benefitting. We got the benefit probably a little before the others because we already were very aggressive with our rates, very aggressive with making a stand and we were geared up in that we were under capacity on investment loans so we had no problem absorbing a few more investment loans that came our way as well.”
[Related: Foreign banks hungry for Aussie mortgage market]
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