The big four are scoffing at heady claims made by Yellow Brick Road (YBR) frontman Mark Bouris, after he told News Ltd reporters he’s confident his Macquarie-backed broking house can double its monthly sales of new home loans within a year, creating a ‘tipping point’ that will force at least one of the majors to cut rates.
Bouris says that, although the Macquarie/YBR share of the $1.1 trillion mortgage market is currently miniscule, the duo could grab a meaningful share of the flow of new home loans within a year. He says they would need to settle around $350 million worth of loans a month – roughly 5% of the value of loans sold through bank branches.
''Banks aren't going to take much notice of us unless we're in that 5 to 10 per cent range,'' Bouris tells News Ltd. ''If we can take market share from them, it becomes a volume game. They will have to fight back on volume, and to fight back on volume you have to fight back with pricing.'”
But a Westpac spokesperson says the possibility, while no-doubt well-intended, is faint at best.
“We’ve got a discount up there at the moment of one full percentage point off loans over $500,000 and 90bps discount off our standard mortgage variable rate out of between $250-500,000. So everyone’s out there competing for business. I’m sure Mr Bouris is keen to talk up his business and he’s trying to replicate what he did with Wizard 20 years ago.”
“The interesting thing from YBR is, in effect, they’re having white label mortgage products provided by Macquarie and, depending on their funding (I don’t think YBR is a deposit-taker), he might be able to access some cheaper wholesale funding costs - and there’s no doubt that those costs could come down,” says the spokesperson.