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Direct-only lenders embracing broker strength

by Fabian Cotter13 minute read
Direct-only lenders embracing broker strength

Mortgage Choice’s new partnership with Athena demonstrates how direct-to-consumer lenders are increasingly seeing the value of brokers.

Frustration-slaying direct digital loan applications are increasingly becoming key weapons in a broker’s arsenal, with Mortgage Choice and Athena Home Loans the latest to announce a “white label” product relationship (18 October).

The lender, which was founded in 2017 and officially launched into market in 2019, has settled more than $5.6 billion in home loans. It originally launched as a direct-to-consumer lender, building a digital home loan platform to “…deliver savings to borrowers, backed by local home loan experts, seven days a week.”

The lender had told The Adviser in 2018 that it was keeping the door open for broker partnerships, and first started working with the channel last year, after partnering with FAST.


However, the fintech has now expanded this reach further by launching a new white label loan offering with Mortgage Choice, its first such agreement.

As Athena chief executive Nathan Walsh told The Adviser: The traditional mortgage application process frustrates brokers and borrowers alike with its paperwork and long wait times.

“Over the past year Athena has been working closely with a group of leading brokers to design an exceptional digital home loan experience; to build a proposition with brokers, for brokers, that delivers a response in hours not weeks.

“We believe brokers are essential in the Australian mortgage ecosystem, serving as much as 70 per cent of originations.

“Borrowers value the advice and service that helps them move with confidence through their home finance journey. 

“We want to make sure the benefit of Athena’s innovative products are available for these broker customers.

Strategic ‘white label’ partnership with Mortgage Choice

Mortgage Choice and REA Group’s new partnership with Athena Home Loans will “…bring together Athena’s industry-shifting home loan products with the scale and distribution network of the Mortgage Choice brand,” the brands explained.

The Mortgage Choice Freedom and Mortgage Choice Flex white label products will offer a competitive rate structure that ensures existing customers will always receive the same rates as new customers on like-for-like loans, it outlined.

The dynamic pricing structure behind these products rewards customers for paying down their home loan, automatically lowering the interest rate as the size of the mortgage reduces relative to the initial purchase price of their property.

The new products are expected to hit the market in mid-2023 and will be available through the Mortgage Choice broking network.

The product will be integrated with the Simpology platform (part-owned by REA Group), a digital loan origination platform that powers end-to-end smart loan application journeys.

This will provide customers with a streamlined application process through their Mortgage Choice broker. Customers will then be able to manage their mortgage through a mobile app.

“Customers are increasingly demanding real choice, and we’re delighted to offer Australian borrowers a product that rewards their loyalty, and gives them confidence that they will never miss out,” said Anthony Waldron, CEO of Mortgage Choice and Financial Services at REA Group.

Mortgage Choice is proud to be the first white label partnership for Athena Home Loans.

“No matter how long they hold the loan, they will always receive the same low interest rate as a new customer on the same loan product, and their rate will reduce over the life of the loan as the size of their mortgage reduces.”

Tapping into solid broker strength and reach

The scale of Mortgage Choice’s network and the reach of REA Group — with realestate.com.au’s audience of more than 12 million visitors each month — will enable Australian borrowers to “… easily access these unique products,” Mortgage Choice confirmed.

“For some time now, Mortgage Choice has admired Athena’s ethos that ‘it’s not about having a home loan, it’s about getting rid of your home loan’,” Mr Waldron continued.

“We are focused on delivering a better experience and greater value for our customers and this means constantly driving innovation in the lending marketplace.

“As an Australian household name, and with more than 1,000 brokers across Australia, Mortgage Choice is uniquely positioned to provide Australian borrowers with access to Athena’s alternative to traditional mortgage structures — no-nonsense products that acknowledge customer loyalty and reward people for paying down their mortgage.”

Loyalty the new dollar dagger to the heart

Recent research conducted by Athena and CoreData into lender behaviour revealed fair value is a hot topic for borrowers.

While 82 per cent of Australian home loan customers said they’re loyal to their lender, 86 per cent feel they are being penalised for their loyalty when a lender gives a better rate to new customers — and 98 per cent feel they should be rewarded for their loyalty, the research revealed.

Mr Walsh highlighted: “According to the latest RBA data, customers loyal to their lender are paying an average of 48 basis points more on their mortgage than new customers.

“This ‘loyalty tax’ is costing Aussie borrowers billions.

“So we are thrilled to be partnering with REA Group and Mortgage Choice to offer Athena’s game-changing products to help even more Australians pay off their mortgages faster.”

Direct-only lenders and the broker synergy

This recent partnership continues a trend of direct-channel lenders realising the benefits of the broker channel, and brokers gaining more formal access to digital loan products and services.

Last December, Connective Home Loans (CHL) partnered with Digital Mortgage Solutions — the technology provider to Nano Home Loans — to offer its broker members a “fully digital home-loan”, where brokers could receive unconditional approval for the client “in minutes”. 

The new product, called Connective Affinity, was unveiled to brokers during a Connective webinar demonstrating the new product last year.

[Related: Lightning Fast: How speedy approvals are done]

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