Backed by some of Australia’s biggest financial institutions, white label loan products are now a force to be reckoned with
IN YEARS past, many brokers would have passed over white label products when discussing the most suitable lending options with their clients.
Today, the story is very different. White labelling has been transformed from a boutique offering to a mainstream lending option across the third party distribution channel.
Almost every aggregator now offers a white label product suite, and white labelling is not only well regarded but also widely used by brokers.
In many cases, white label solutions feature in the top five spots on an aggregator’s lender panel.
Mortgage Choice chief executive Michael Russell says the aggregator’s white label product, Bluegum, regularly features in the top three lender positions, while FAST’s acting chief executive, David O’Toole, says FASTLend is achieving similar success with FAST brokers.
White label products are popular with brokers for several reasons, but not least because brokers who sell their aggregator’s white label products tend to have commissions paid faster.
Greater levels of service and faster turnaround times are two of the key benefits for borrowers who choose a white label loan.
“Borrowers not only have all the security of dealing with a major bank, but they also receive the superior service of a non-bank lender,” Advantedge’s general manager, distribution, Brett Halliwell says.
“Advantedge has a team of BDMs – much the same as any other lender – so brokers can put in a call to their aggregator and they’ll be able to offer an overview of the product range and service proposition, and connect brokers with the relevant BDMs and other support teams.”
While servicing is crucial to the success of an aggregator’s white label proposition, funding also plays a critical role.
These products are very well priced as the lenders who provide the funding are often major financial institutions. White label lenders can source funding from a number of channels, including the capital markets and bank balance sheet funding.
One of the biggest funders in the market today is Advantedge.
Advantedge is the only white label funder to boast a AA rating and the lender has also been recognised as Funder of The Year at the Australian Lending Awards for past two years running.
A wholly-owned subsidiary of National Australia Bank, Advantedge funds the white label mortgage solutions provided by Mortgage Choice, Smartline, ChoiceLend, PLAN Lending and FASTLend.
Because Advantedge is backed by NAB, the group also has the largest pool of balance sheet funds of any wholesale funder.
As a result, according to Mr Halliwell, the funder can provide some of the most competitively priced products on the market.
According to the interest rate information sheets of FASTLend, ChoiceLend and PLAN Lending, the standard variable rate for a full doc product with an LVR lower than 75 per cent sits at 6.34 per cent.
Meanwhile, NAB currently boasts a standard variable rate of 6.99 per cent, while CBA’s rate is 7.01 per cent.
The aggregators that use Advantedge as their funder can offer sharply priced rates because they do not have the same infrastructure costs as Australia’s big banks, Mr Halliwell says.
The majors have to pay advertising fees in a bid to promote their products to both borrowers and brokers; aggregators do not face these same costs.
These cost savings can then be passed on to borrowers.
With NAB’s recent announcement that the lender is committed to being the cheapest major on the market for the remainder of the year, Mr Halliwell believes Advantedge will continue to offer both excellent service and charge cheaper standard variable rates.
Aggregators can rest assured that Advantedge is also set to remain competitive for the long haul.
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