Non-majors increase in popularity among refinancers

by Phil McCarroll15 Sep 2016
 Australian refinancers are increasingly turning to non-major lenders according to data from major aggregator AFG.

AFG’s latest Competition Index showed the past three months saw non-majors increase their market share of refinancers by 5%.

“The non-majors have increased their share of the refinancing market from 31% to 36% in the last quarter,” Mark Hewitt, AFG general manager of sales and operations, said.

“ING are the big winner, lifting their share from 3.1% to 7.8%. CBA has taken a back seat dropping their share of the refinancing market from 20.2% to 14.6%,” Hewitt said.

The increase in refinancers heading to non-majors has helped them increase their overall market share, with them now accounting for 27.8% of all mortgages, up from 26.8% in June.

“In terms of overall mortgage sales, ING are at a 12 month high on 5.2% of the non-major market. This is at the expense of Suncorp, who are now sitting at 1.8% after a peak of 7.6% of the non-major market back in March of this year,” Hewitt said.

“Across all mortgage types ANZ and Westpac both regained market share to close out the quarter at 16.9% and 13.8% respectively. At the same time CBA pulled back from pricing discounts to drop their share to 17.5%.”

In the investor market, the major lenders account for 75.9% of all mortgages, with the CBA’s 19% the largest share by an individual lender.
ANZ takes second place with 15.7%, followed by Westpac with 15.2%.

Major lenders account for 78.2% of first home buyer loans, with Westpac account for close to a quarter (23.8%) on its own, followed by ANZ and CBA at 16.8% and 16.6% respectively.

Low interest rates have driven demand for fixed rate loans, with ANZ benefiting in particular.

“ANZ has doubled their share of the fixed rate pie since April, with their total share of this market now sitting at 24%. In the same period CBA has seen their share of the fixed rate market shrink by 67%,” Hewitt said.

“For the non-majors chasing those looking to fix their interest rate, ING was again a winner doubling their share of that segment of the market to [6.4%].”

Overall, non-major lenders accounted for 26.4% of fixed rate loans in August, up from 19.1% in July.