Majors claw back mortgage market share

by Julia Corderoy03 Feb 2015
The major banks are clawing back their market share from the non-majors, grabbing an additional 7.4% of the home loan market in January. 

The four major banks and their subsidiaries now account for 74.9% of all loans, according to AFG’s monthly Mortgage Index. The additional 7.4% represents around $206 million in home loans processed by AFG. If reflected across all distribution channels, this would equate to an additional $2 billion market share in one month.

Last month, AFG’s Mortgage Index revealed that non-major lenders steadily increased their market share during the second half of 2014, from 25.3% in July to a high of 32.5% in December. However, the fight-back by majors saw this share pushed back to 25.1% in January.

Mark Hewitt, general manager of sales and operations at AFG, said competition is heating up in the mortgage market and isn’t likely to slow down.

“We saw very high levels of competition during the second half of last year, with non-major lenders winning significant business, especially among borrowers looking to refinance. But in a single month, majors have put non-majors back to where they were six months ago. Whatever the outcome of tomorrow’s rate decision, lenders of all sizes are having to compete aggressively for borrowers’ business.”

The Index also revealed that the proportion of first home buyers increased from its all-time low in December, making up 8.3% of mortgages in January. Although, this figure is still well below the long term trend of 15%.