Non-majors' refinance market share surges in 2014

by Julia Corderoy21 Jan 2015
Non-major lenders increased their share of the refinancing loans market by 45% in 2014, recording the highest proportion of home loans non-majors have achieved in any home loan category since the GFC.

AFG’s quarterly Competition Index shows that non-major lenders wrote 41.4% of all new refinancing loans in December, up from a 28.4% market share in January. The success in this category boosted their overall share of mortgages processed to an all-time high of 32.3% in December. This compares with a share of 24% of all home loans processed in January.

Mark Hewitt, AFG’s General Manager of Sales and Operations, said the growth was impressive given the intense competition in the mortgage market, but he expects the competition to heat up even more this year. 

“2014 was the most vigorous year of competition since the GFC, and there’s every indication that this trend will continue in 2015. Some are predicting a slowdown in market growth this year and this will intensify competition even further. In particular I am expecting the majors to hit back hard in the next quarter,” he said.

Non-majors also accounted 38.7% of fixed rate loans and 31.5% of first home buyer loans in December. In an investor-driven market, major lenders still account for 73.3% of all new investor loans, although this is lower share than the 80.3% they held in January last year.

Suncorp was by far the strongest overall performer among non-major lenders, with 9.7% of all new home loans in December. Macquarie accounted for 5.4%, ING for 3.7% and Heritage Bank for 2.4% of all new home loans.