Non-majors triple fixed-rate market share

by 21 Jan 2014
Non-major lenders tripled their market share of new fixed-rate loans in the final quarter of 2013, the latest statistics show.

AFG’s latest Competition Index shows that between February and November 2013, non-major lenders' share of the fixed rate market soared from 13.6% to 42.3%. This share fell back slightly in December to 38.2%.

Non-major lenders making significant inroads into the fixed rate market included ME Bank, which peaked at 13.8%, ING on 7.4% and Suncorp on 6.0% of all new fixed rate loans (all November figures).

Non-major lenders' overall share of all new home loans peaked at 27.7% in November 2013, the highest figure AFG has recorded in the three years since it has been monitoring competition. This figure compares with an overall share of 21.7% in November 2012 and 18.5% in November 2011.

Mark Hewitt, AFG general manager of sales and operations says 2013 saw competition heating up between lenders in a way not seen since before the GFC.

“The non-majors have been agile and focused on service delivery, targeting specific borrowers, and using very attractive fixed rate deals to great effect,” said Hewitt.

“While the loan books of major lenders ensure their continued dominance, it is great news for borrowers that they now have much wider choice.”

Among different types of borrowers, major lenders continued to attract around three quarters of new home loans arranged for investors a trend that continued for most of the second half of last year, down somewhat from the 80% of loans they arranged for investors at the start of 2013.

Non-majors did best from borrowers seeking refinance in many cases seeking fixed rate deals where their collective market share rose to 35% in November. Non-majors also grew their market share among first home buyers during 2013, from 25% in January to 29% in December.