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Big four losing share

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Mortgage broker ResiMortgage chief executive Lisa Montgomery.

HERE at H&Y we are seeing that the smaller banks are trying to assist with a “how can we do this” approach rather than “why should we not do this”.

It would seem that the big four are now trying to fit everyone into a template and if it doesn’t work, then move on. Others agree...

AUSTRALIANS are again flocking to smaller banks and lenders for their home loans after the big four banks recorded their biggest drop on record of mortgage-broker loans.

The big four banks account for just 59.8 per cent of new home loans taken out nationally through mortgage brokers, compared with 64 per cent a year ago.

In Victoria, the figure has fallen from 63.9 per cent to 62.3 per cent.

According to independent research firm Market Intelligence Strategy Centre, the big four banks have lost all their gains in market share that they clawed back during the global financial crisis and are now back to pre-GFC levels of 2007 and 2006 when smaller lenders were rapidly gaining popularity.

Aggressive competition, switching incentives and discounted rates have helped the non-major banks increase their market share, a MISC spokesman said.

Although the big four banks, Westpac, ANZ, Commonwealth and National, have had a slightly lower market share of broker mortgages, the latest June statistics show it is the biggest single drop on record, down 4.2 percentage points in 12 months.

Mortgage broker ResiMortgage chief executive Lisa Montgomery said the dramatic change in market share indicated increased competition and a "win" for borrowers.

"Major banks aren't getting as much market share because the second-tier banks and other lenders are becoming more popular. And the reason they're more popular is because they're offering better deals, so that's got to be a win for borrowers," Ms Montgomery said.

She said it had been a deliberate strategy of the smaller lenders to offer good value to brokers and their customers. "What we are seeing now are the results of their hard work and their efforts to offer better value than the big four banks," she said.

"During the financial crisis, there was a flight to the big four banks because of the uncertainty and fear surrounding those times and the uncertainty about smaller lenders not being as safe. Now that more people understand the financial system, the volume of new mortgages is being steered across many lenders, not just the major players."


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