The major aggregation group has signed a strategic partnership with 86 400 to give its brokers access to the neobank’s digital mortgage offering from next month.
The digital mortgage lender (named for the number of seconds in a day) first launched its digital home loan product in November 2019 exclusively via the broker channel. It has grown over the past seven months to $40 million of loans settled or awaiting settlement.
Following on from its aggregation agreements with Buyers Choice earlier this year (as well as its previous arrangements with Vow Financial and Specialist Finance Group), 86 400 has now joined the lending panel of Australian Finance Group (AFG), making its home loan products available to the group’s 3,000-strong broker members.
The lender noted that the digital mortgage offering for brokers, which enables remote VOI, e-signature and digital expenses collection, would be available from 10 August (following accreditation and system set-up).
It suggested that its “Own” home loan product would be particularly welcome to brokers in a time when turnaround times continue to blow out.
Robert Bell, the CEO 86 400, said: “Brokers and customers want an application experience that’s easy to use and a process that gets them a decision quickly, giving both the broker and customer certainty and peace of mind, and that’s what we’re delivering through our digital solution.
“Partnering with AFG allows us to continue to help more Australians and more brokers realise the benefits of the 86 400 home loan.”
Clawback structure ‘a lot more fair’
Speaking to The Adviser, AFG’s head of sales and distribution, Chris Slater, said the aggregation group had brought the lender onto its panel following demand from its members, adding that “as we move toward best interests duty, it’s been top of mind for us to make sure that our brokers have access to the very best products and services that are out there in the marketplace”.
He said: “The whole idea of making the [mortgage] process faster, easier and more seamless just makes sense to everyone, and especially from a customer point of view.”
Mr Slater particularly welcomed that 86 400 “has really considered the broker in the transaction,” suggesting that its clawback arrangements were “a lot more fair”.
He explained: “Clawback is pretty blunt at the moment. [For most lenders], if the loan is moved after 0-12 months, the broker loses 100 per cent of their revenue, and between 12-18 months they lose 50 per cent of their revenue.
“But 86 400 has come up with a model where 100 per cent clawback is only for the first six months, which we think is more reflective of the work that has gone on from both sides. Then from six to 24 months, it is done on a pro-rata basis. So, the broker is actually getting something for the work they are doing,” he said.
Mr Slater concluded: “One of our core values over the last 26 years has been supporting our brokers to bring competition to the market, and the [team members] at 86 400 are very passionate about competing, so they’ll fit in very well at AFG.
“We will continue working closely with our brokers and funders, like 86 400, to give them the best possible chance to compete for business.”