Service at the centre: mortgage managers in focus

The appeal of mortgage managers lies in their ability to offer personalised services. While somewhat akin to brokers, they have the added benefit of wielding the authority and flexibility of lenders.

Some mortgage managers may raise funds directly through the securitisation market, while others partner with existing lenders to design loans with unique variations or rates, ensuring a diverse array of options for borrowers.

Amid tightening lending criteria in mainstream channels, mortgage managers are offering a lifeline to borrowers who may otherwise struggle to secure financing. By leveraging unique offerings and loan products, they can cater to niche markets and adapt offerings to remain competitive. Their flexibility and willingness to accommodate non-traditional income sources or low-documentation applicants also fill critical gaps in the lending landscape.

Brokers, recognising the value of these offerings, are also increasingly turning to mortgage managers to meet the diverse needs of their clients.

Stuart Styles, managing director and head of credit at Arthurmac, told The Adviser: “We are seeing great inflows from brokers who require timely responses on purchases and refinances.

“As a mortgage manager, we are able to act quickly to meet critical deadlines for our referrers’s clients.”

Mr Styles noted that more borrowers are turning to mortgage managers as they have more flexible – and broader – service offerings and are able to find a bespoke solution.

Arthurmac, for example, has been seeing steady inflows for alt doc and low doc applications, both for residential and commercial, according to Mr Styles.

Addressing underserved borrower segments, such as those with overseas income or self-managed superannuation funds (SMSFs), is a core part of a mortgage manager’s raison d’etre.

Better Mortgage Management (BMM) has told The Adviser that it has been writing a lot more SMSF loans for both residential and commercial properties recently.

BMM managing director Murray Cowan explained that demand has been stemming from the fact that more Australians are using SMSFs for investment purposes (including a greater number of business owners purchasing their own commercial properties) and the fact that mortgage managers are offering lower rates than the banks.

He said: “There is a notable trend in refinancing existing facilities that may have been held with traditional banks for a considerable period, typically ranging from three to five years.

“Ever since 1 January 2023, banks have been mandated to maintain higher capital reserves for SMSF loans. They don’t like having to do this, so they charge the customers higher rates as a result.”

As such, borrowers who may be paying around 9 per cent on a residential SMSF loan if they are with a bank, are refinancing over to mortgage managers such as BMM, which are able to offer rates around 7.17 per cent (with commercial SMSF rates around 50 bps higher than that).

“Being able to save a customer, say 1.50 per cent in interest, is a strong lure for new business,” Mr Cowan said, flagging that mortgage managers are also able to provide unique offerings to clients. For example. BMM has a free offset account on its SMSF loans, has no clawback on its Bold SMSF products, and can extend LVRs up to 90 per cent for residential and 80 per cent for commercial property. There is also no clawback with the Bold SMSF products.

Given the changing lending environment – which has been shifting at breakneck speed – there has never been a more opportune time to explore the advantages offered by mortgage managers.

By placing customer service at the centre of what they do, these players play a crucial role in bridging the gap between borrowers and lenders, offering tailored solutions in an increasingly challenging financial environment.