Q. What do you think is driving more borrowers to non-bank lenders?
It’s been a great time for non-banks the last three years. Non-banks have a great role to play due to their agility, their speed, their product suite, etc, so they can really provide customers with great outcomes.
Most non-banks also have a 2 per cent serviceability buffer, which means, when you compare a like-for-like loan with a bank, borrowing capacity with a non-bank is likely higher.
When you compare a like-for-like loan with a bank, borrowing capacity with a non-bank is likely higher
When a customer comes to a broker, they’re trying to solve a problem and the broker tries to solve that problem as fast as possible. Our aim at Brighten is to help do that well.
Q. What specific borrower segments are driving volume to non-banks?
We are seeing substantial volume in the full-doc prime space from clients seeking expanded borrowing capacity such as investors purchasing their second or third properties. Additionally, a lot of banks have pulled out of trust lending, which has funnelled a massive pipeline of full-doc trust borrowing directly to non-banks.
Self-managed super fund (SMSF) lending is another booming segment as everyday Australians increasingly seek to take control of their superannuation to build property wealth.
It has also actually been a huge 12 months for construction. Construction is inherently stressful, so our focus is entirely on seamless execution through the five main drawdown stages. For example, promptly paying builders at milestones like the slab and frame ensures projects remain on track. Most of our clients successfully complete their builds within a 12-month window.
Q. You recently launched reverse mortgages. How do you see that product evolving?
I’m very passionate about Australians having access to it, and I feel it’s an underserved product to the market.
There is an enormous cohort of retiring Baby Boomers who are asset-rich but cash-poor. This product safely unlocks equity without forcing them to downsize. It is highly regulated – for instance, the maximum LVR starts at 15 per cent at age 55 and scales up 1 per cent for every year after that. Interestingly, data shows 80 per cent of these loans are repaid voluntarily, typically upon the ultimate sale of the home, rather than upon death.
That’s why I think of it as home equity release. It is just access to the asset that you’ve worked hard to repay, whether that’s through investing wisely or working hard.
We went live with our reverse mortgage product just three months ago and have already achieved our six-month volume target.
Q. What advice would you give to brokers looking to maximise their success right now?
The ultimate strategy is to diversify, diversify, diversify.
Brokers should actively expand their toolkits into commercial lending, SMSF structures, and home equity release.
Also, when submitting loans in a complex market, providing comprehensive information upfront is the secret to a fast turnaround. Our internal motto is that “life is always brighter with Brighten”, and we back that up with a dedicated, highly responsive BDM team and fully assessed, 90-day pre-approvals to give brokers total certainty.
