Second tier lenders have made a strong comeback with some reporting significant volume growth from the broker channel.
The swing to the non-majors is reflected in The Adviser’s latest weekly straw poll. The survey revealed that two out of three of 545 respondents are writing more business with second tier lenders.
Citibank’s head of distribution and marketing Peter Hayward said second tier lenders are starting to stake their place in the market once more with competitively priced and innovative mortgage products.
“We’ve come back into the market recently, as have several other second tier lenders like Adelaide Bank,” Mr Hayward told The Adviser.
“We have seen a significant uptick in business – probably up 100 per cent on this time last year. We have sharpened our pricing in recent weeks, which has resulted in a natural shift of brokers using our services.”
LJ Hooker broker Bob Campbell said second tier lenders are not only offering competitively priced products, they are also offering greater product flexibility and excellent customer service.
“The majors are not the be all and end all. Second tier lenders have stepped up to the plate recently and are now offering innovative products at competitive rates,” Mr Campbell told The Adviser.
“I am definitely writing more business with second tier lenders. Some borrowers are hesitant to stray away from the majors, however, once I compare the best major product, with the best second tier product the results speak for themselves.”