The days of 100 per cent loans may soon make a dramatic reappearance, one brokerage director has claimed.
Speaking to Smart Property Investment's sister title, The Adviser, Loan Market’s Mark De Martino said he would not be surprised to see many lenders moving back into the 100 per cent loan space over the coming years.
According to Mr De Martino, with growth in the property market fairly flat, lenders are constantly looking for new ways to attract business and grow their share of the pie.
“All the lenders are fighting for market share,” he said. “We have seen it for some time and we will continue to see it happen. The reality is, they can only compete on price, policy and service for so long; eventually product innovation must play a role.
“When it does, I believe we will see the return of 100 per cent loans. A few years ago everyone was saying ‘We will never see the return of 100 per cent loans’. I disagree. As long as a broker does their due diligence and ensures the borrower can service the loan, I don’t see any reason why we shouldn’t have 100 per cent loans.”
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