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The onset of COVID-19 has seen a change in consumer sentiment, including an uptick for lending through the big four banks and enhanced digital payment options.
Research released by Lendi has shown that as rates have fallen, a swing towards the big four banks has occurred, although it has tapered off in the last month.
“Thirty-eight and 37 per cent of our loans were settled with the big four in May and June, respectively. However, loan submissions over the last two months indicate that the share of settlements going to the big banks will be reduced in coming months.”
This is despite the big four banks taking longer to process mortgages on average as well as charging consumers an 8 basis point premium on rates.
“The swing towards the big four was even more pronounced among refinancing owner-occupiers as they sought out low fixed rates and cashback offers. However, this, too, appears to be normalising,” Lendi co-founder and CEO David Hyman said.
Lendi data also showed that an increasing number of borrowers were already embracing online home loan processing before the pandemic took hold locally.
To be expected, social distancing accelerated this uptake as more lenders modified their policies and customers changed their behaviour. Over the first quarter of 2020, Lendi saw a 59 per cent increase in borrowers settling loans via the platform when compared with the first three months of 2019.
Between April and the end of June, this increase was more pronounced and Lendi saw a 66 per cent increase in the volume of loans settled on its platform when compared with the same period last year.
“Refinance customers have traditionally been more comfortable with digital home loan processes, but social distancing measures have brought more new purchasers into the fold,” Mr Hyman concluded.