A large proportion of mortgage brokers say they expect to sell more home loans from smaller and regional banks, according to recent survey results.
Respondent brokers said this was because smaller and regional banks had become as competitive as large banks and provided high levels of service.
In the survey of MyState Bank’s national broker network, it was asked whether brokers would use smaller lenders more often. Nearly half (46%) said they would definitely do so. Twenty-three percent voted ‘yes, probably’ and 26% voted ‘yes, possibly’. Only four percent said they doubted they would go to smaller lenders and less than 1% said they would broker fewer loans from small and regional banks.
The main reasons given were that ‘smaller banks are now just as competitive as larger banks’ (35%) and service levels (34%).
Other reasons for broking more loans from smaller and regional banks included maintaining competition with big banks, customer preference for small bank loans and risk management, with growing concern that large banks might move away from the broker channel in favour of their own networks.
MyState Bank group executive broker distribution, Huw Bough, said the survey results were indicative of the fast-changing home lending landscape in Australia.
He added, “The survey results are encouraging for smaller regional banks like MyState Bank, which have historically operated at a funding disadvantage to larger banks. The wider industry will be watching closely over the coming months to see if the findings of the Royal Commission will encourage more home owners to look beyond larger banks when it comes to mortgage choice.
“Technology has really opened up the mortgage market to smaller lenders in recent years as the need for a branch network is no longer a necessity. Smaller lenders like MyState Bank can now offer mortgage products with all the features of the products offered by our larger counterparts.
“Being a smaller bank, we are reliant on the broker channel for distribution. We have a very clear focus on its importance and the value brokers bring customers through providing greater choice and competition. Having this clarity makes it easier to move from relationships to partnerships.”
