Turnarounds have improved for the fourth month in a row, with time to initial credit decision at its fastest level in over a year, according to the latest Broker Pulse.
Momentum Media’s research arm, Momentum Intelligence, has released its latest Broker Pulse report, which seeks to understand the collective lending experiences of residential mortgage brokers each month in a bid to help them make more informed recommendations to clients.
The latest survey, which received 243 responses from Broker Pulse members between 1-10 August 2021, found that brokers had continued to see improvements in turnarounds during the month of July.
According to the data, the average time to initial credit decision across all lenders was down to an average of eight business days in July 2021, its fastest time since the pandemic first hit (March 2020).
It marks the fourth month in a row that average turnarounds have improved, after blowing out to an average of more than 11 business days at the end of 2020 and early 2021.
Brokers added that doing business with lenders was the easiest it had been since July last year, and BDMs were at their most highly rated since November.
Credit decision transparency was also at its highest level since June.
How the different segments fared in July
The largest improvements in time to initial credit decision were made by the banks.
The most commonly used banks (used by more than 20 per cent of broker respondents, referred to as “large ADIs”) were making credit decisions in 8.6 business days, on average – their fastest time since March 2020.
Taking only three days to initial decision, ING outpaced Macquarie by one day, snatching the latter’s position as the fastest-moving large ADI, with a loan turnaround that was three times as fast as July’s average speed (nine days).
Major banks also continued to make inroads. Momentum Media director Alex Whitlock previously cautioned major banks that “if [they] do not fix their channel conflict when it comes to time to approval, they will miss out on the business from brokers”. Indeed, the Commonwealth Bank of Australia’s (CBA) most recent financial results show that the proportion of new mortgage lending written by brokers had dropped in the last year to 39 per cent.
However, based on the latest Broker Pulse findings, efforts to unclog bottlenecks in broker-lodged applications are now starting to materialise.
All four major banks improved their turnarounds in July, brokers reported, with CBA now the fastest of the majors, at eight business days. The lender recently told the Adviser that it had hired more staff, updated its tech stack, and reduced accreditation barriers as part of its “refreshed” third-party banking strategy.
Meanwhile, “small ADIs” (less than 20 per cent broker usage) were at their speediest since June 2020, at 7.1 business days.
86 400 continues to be the fastest “small ADI” reportedly deciding on broker-lodged applications within only three days.
ME Bank and ANZ were the two lenders that had most improved their turnarounds (both by four days), now sitting at eight and 14 days, respectively.
Although improvement in turnarounds was not as steep as with ADI lenders, non-banks held their average turnaround time of six business days for the six month in a row. The segment has been consistently reaching initial credit decisions in under a week for the past year.
The non-banks also drove the increase in overall credit assessor rating, with Bluestone Mortgages scoring 100 per cent consistency in credit assessment, up from 64 per cent last June.
Brokers interested in joining the Broker Pulse community can sign up to Broker Pulse here. Each month, participants of the survey will receive full access to the report and exclusive insights into the research. Sign up today and receive last month’s results straightaway.
[Related: Turnarounds show green shoots of improvement]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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