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Non-banks to make play for market share

by Staff Reporter7 minute read

Jessica Darnbrough & Vivienne Kelly

With funding costs coming down, Australia’s non-bank lenders could be set to steal a greater share of the mortgage market.

Speaking to The Adviser at the Australian Mortgage Conference in Sydney last week, Liberty Financial’s John Mohnacheff said the falling cost of funds would enable Australia's non-banks to pass on greater savings to customers in the form of cheaper interest rates.

“The securitisation market is opening up, there is no doubt about that,” he said.

“More and more Australian companies are going to the securitisation market which proves there is a lot of liquidity around.

“If this trend continues, it will allow the cost of funds to drop and ultimately make non-bank lenders like ourselves more competitive on price.”

According to Mr Mohnacheff, non-bank lenders have lower overhead costs than that of the majors, enabling them to save money which can then be passed on to borrowers.

“We do not have the same branch network as some of our larger competitors. Because of this, we will be able to pass on our savings to borrowers, which will more than likely put our pricing on equal footing with the banks,” he said.

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