Mortgage market hungry for white label lending

The Australian mortgage market has seen a flurry of new white label agreements in recent weeks as demand for branded home loans heats up.

Mortgage aggregation group Connective is the latest player to get involved, with the announcement of a dual funding agreement and two ranges of mortgage products to be rolled out next month.

Supported by Macquarie and Advantedge’s distribution and service teams, Connective is making substantial investment in resources to support the relaunch of Connective Home Loans.

Speaking to Mortgage Business, Connective’s general manager of strategy and distribution, Steven Heavey, said the group has negotiated excellent arrangements around field support with both funders.

“We think in any relationship in our industry it’s important that we have good BDMs, good field representation, really good quality service and really good products and pricing,” Mr Heavey said.

“If you get all those components right you’ll be successful.”

The aggregator previously had a white label offering with multiple funders through a mortgage management program, but yesterday’s announcement signals a new strategy to involve Advantedge and further integrate Macquarie – which has a stake in Connective – as a separate funder.

As part of its new white label strategy, the group announced the appointment of Michael Goerner as head of Connective Home Loans.

The appointment follows the announcement by major aggregator AFG last month that Chris Slater had taken the reins as new general manager for AFG Home Loans.

The group recently partnered with Advantedge as the primary funder behind its AFG Home Loans Edge product, which was launched nationally at the end of January.

Mr Slater told Mortgage Business that he has seen the success of white label lending with the NAB-owned aggregators and Aussie Home Loans.

“It is very early days for us but our view for the business is to make our brokers feel proud that they’ve got a product they have an affiliation and association with and that it is a good product their consumers like,” he said.

Last week, Astute Financial announced the launch of the Astute Simplicity Home Loan to its national network.

Partnering with Advantedge, the white label solution allows Astute to offer, for the first time, its own branded home loan, which meets the needs of a significant portion of the home lending market.

“We have partnered with Advantedge to invest significantly in key areas like branding, service and sales, which has paid off in terms of the unprecedented interest we’ve received from the pilot group - we had brokers settling multimillion-dollar deals and giving great feedback on their experience,” Astute founder Brad Wood said.

Advantedge general manager Brett Halliwell said the thing he likes most about white label is it ticks a box for all of the stakeholders involved.

“Consumers tend to get very sharp rates, there are competitive commissions for brokers, there is something in it for the aggregator, and we are happy with our returns as a lender as well,” Mr Halliwell told Mortgage Business.

“So it is somewhat unique in that way,” he says.

Specialist lender Pepper has also seen value in white labelling, with approximately 34 per cent of its entire originations coming from the channel.

Pepper’s first white label partner was non-bank lender Homeloans Limited in 2011. Since then it has taken on 20 white label partners.

Mario Rehayem, Pepper’s director of sales and distribution, told Mortgage Business that the group has recently partnered with Yellow Brick Road (YBR) as it continues to expand its white label strategy.

“These guys have a serious concentration on their own brand and they have a strategy to ensure that their brand is prominent in the space they want to play in,” Mr Rehayem said.

“What we’re doing is giving them our ingredients to help them bring that to market.”

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