Brokers continue to flock to non-major lenders

Momentum Intelligence’s Broker Pulse report is a community-driven knowledge base of lender performance that aims to give brokers a bird’s eye view of the residential mortgage lending market. 

The latest report – which collated and analysed the survey responses from 175 brokers regarding their experiences of the lenders they used through October 2020 – has found that non-major banks and non-banks continue to be viewed more highly than the majors. 

When looking at the market positioning of Australia’s residential mortgage lenders (based on both net promoter score and the volume of brokers using the lenders), the non-majors and non-bank lenders were much more highly favoured than their larger counterparts. 

Macquarie Bank continues to be well liked by brokers, with around 40 per cent of broker respondents having used it and 84 per cent saying that the process of using the lender was “easy”. ING and Firstmac also placed highly.

The October report found that ING continues to provide the fastest turnaround times to brokers (three days), followed closely by Macquarie, BOQ and NAB (which had the fastest turnaround of the majors, at seven days). 

Meanwhile, Momentum Intelligence found that non-bank lenders continued their trend of providing speedier turnaround times to brokers – with even the slowest non-bank lender providing initial credit decisions within just six days. 

Of this segment, Pepper Money, Liberty and Advantedge were the most commonly used non-banks. 

However, the Commonwealth Bank of Australia (CBA) was once again found to be the lender that received the highest number of mortgage applications per broker – with an average of 3.3 loans per broker in October 2020. 

Many brokers cited the bank’s increasing ease of use. 

One broker said: “CBA has become one of my favourites because of how easy it is to deal with the assessors and the systems.” 

The results mirror CBA’s loan book performance generally. According to the bank’s results for the first quarter of the 2020 financial year (ending September 2020), its book had increased by $5.6 billion and business lending by $1.4 billion over the quarter. 

Speaking of the monthly figures, Momentum Intelligence’s head of strategy, Michael Johnson, commented: “Brokers are continually scanning the market and keeping their eyes out for better-performing lenders and the Broker Pulse helps them on that search. 

“The large disparity in turnaround times between some of Australia’s largest lenders means that brokers are needing to manage their client expectations effectively to avoid disappointment.”

Brokers interested in joining Momentum Intelligence’s Broker Pulse panel can apply to Momentum Intelligence here. Participants of the survey will receive full access to the report and exclusive insights into the research. 

[Related: Majors saw no net mortgage growth in NSW in October]