Borrowers refinancing an existing home loan are the mortgagees mostly likely to choose an online lender.
New data from loans.com.au has found that 37 per cent of customers who used the online lender were borrowing to buy a property, while 53 per cent were refinancing an existing home loan.
Firstmac managing director Kim Cannon said the data demonstrated customers were informed and empowered in the home loan application process.
“It shows customers are financially savvy and have come to loans.com.au looking for a better deal on their home loan,” Mr Cannon said.
“These are people who have identified the way to get the best deal on their home loan is not through one of the big banks, it’s through a lean lender who doesn’t pass on the costs of a branch network, broker commissions, and advertising campaigns,” he said.
Recent data shows the major banks write 92 percent of Australian home loans but, with increasing competition across the home loan industry, online lenders are gaining momentum.
“Borrowers who are refinancing know their way around the home loan sector; they’ve been through the exercise with their original lender,” Mr Cannon said.
“It is heartening to see them move their loan to loans.com.au because experience tells them a streamlined lending model is what they need,” he said.
Mr Cannon expects the home loan market to see great change towards online money management as technology makes the user experience quicker, simpler, and more convenient.
“In the past year or so, banks, credit unions and building societies have closed 130 branches around Australia, while loans.com.au’s application rate has increased 187 per cent and loan amounts have doubled,” he said.
“It doesn’t seem to bother customers that there is not a local branch to walk in to; they are happy to manage their money from the couch, the office, train, park, or café.”