Australia’s biggest bank could be making an aggressive play to win broker business after losing a significant amount of home loans through the third-party channel in recent months.
While its biggest rivals NAB and ANZ have been steadily increasing their share of broker-originated mortgages, major lender CBA saw its third-party flows drop by 8 per cent over the 2017 financial year.
The fall was more pronounced in the second half. For the six months ending June 2017, brokers wrote just 38 per cent of new home loans for the retail banking services, down from 46 per cent on the prior comparative period.
Regulatory measures to curb interest-only lending, introduced in March, have been a key driver. However, one Sydney broker believes that CBA is now back in business.
FirstPoint broker Chris Pryer told The Adviser that the major bank is marketing “some very competitive rates” at the moment and appears to have streamlined its third-party services.
“I know there are some other lenders with sharp fixed rates out there at the moment, but CBA are matching them, if not bettering them,” Mr Pryer said. “They are also giving large discounts on variable rates.
“Their turnaround times are still within 24 to 48 hours. We spoke to them this week, and by the sounds of things they are very much back on. They have delivered on the deals we have given them so far.”
Earlier in the year, CBA used brokers as a lever to control its interest-only mortgage volumes following instructions from APRA. For a period of time, CBA stopped refinancing investor mortgages through the third-party channel. Any CBA customers with an investor home loan looking to refinance would have to visit the bank directly.
The management of regulatory caps is now creating some interesting dynamics in the home loan market, such as price discounting, to win more business and rate hikes to cool demand.
“Different banks are turning the tap on at different times when they get their back office in order,” Mr Pryer said.
[Related: APRA curbs driving turnaround blowouts]
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James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.