Borrowers turn to smaller lenders
People seeking home finance are increasingly turning to smaller lenders because they can often secure a better deal.
Loan Market chief operating officer Dean Rushton said loan lodgements with the major banks had fallen by eight per cent over the past three months.
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Mr Rushton said just 60 per cent of loan applications made through Loan Market brokers were with the big four banks.
"There has been a significant fall in loan traffic to the major banks,” he said.
“It is clear that in a climate of rising interest rates that prospective mortgage holders are looking around for the best deal and they are finding competitive offers from the smaller lenders.
“Even 12 months ago, the big brands were still benefiting from the post-GFC caution of borrowers wanting who wanted to be placed with known brands. With the effects of this fading, the second tier lenders are gradually gaining ground.”
Mr Rushton said increased competition in the mortgage market would be of enormous benefit to homeowners also struggling with rising cost of living commitments.
“There are a number of challenges facing the market and foremost is the concentration of power with the major banks but they are getting more competition from the smaller lenders,” he said.
