Industry in the mood for more innovation

“A lot of people think innovation means cheaper money. I don’t agree with that. All good businesses run off the back of product advantages rather than price focus,” he said.

Mr White said he had no particular innovations in mind, but floated the idea of banks looking at 30-year fixed rate loans.

BC Home Loans director Brad Collett said one worthwhile innovation would be to allow borrowers to transfer their LMI policies when switching lenders, provided the insurance provider remained the same.

He said he speaks to his first home buyer clients two years into their loans, but that some of them have no incentive to refinance because the savings would be eaten up by new LMI premiums.

That forces borrowers to remain with less competitive lenders and also reduces the incentive for the incumbent to provide a better deal, he added.

Mr Collett said LMI portability would also help brokers. “Not everyone would result in a refinance – you would give the current lender the opportunity to retain the business,” he said.

“But doing things like that creates more business anyway because people tell their friends and family about how you’ve been able to save them money.”

Karen Goodrich from Goodrich Home Loans said no-deposit loans were an idea worth considering – although she stressed that it would only be under very limited circumstances.

She told The Adviser that any product that could help younger Australians access the property market could have merit.

Ms Goodrich said a no-deposit loan might suit the limited number of borrowers who could prove they would be responsible savers and could repay the loan, and who wanted to buy in an area that wasn’t risky.

[Related: More grim news for first home buyers]