Check out the competition in Mortgages

. 3 min read

At LoaDolphin it's easy to check out the competition when it comes to your mortgage. We always knew that by getting banks and brokers to compete for your home loan online, the service will create better options, convenience, and true value which ultimately translates to tangible savings for you as a borrower. Over the past 17 plus months since launching our service to the market, we have learnt that there is a lack of awareness about the kinds of banking and non-banking options that currently operate in the Australian market.

So this blog post will provide you with some honest insights. So sit back and check out the competition.

With so much talk about the industry, a banking tax, ASIC's mortgage broker remuneration report, Sedwick's independent report on Retail Banking Remuneration there's never been a better time to check out the competition in the market.

Currently, there are 3 different kinds of entities who operate within the regulated banking mortgage market

  1. Major Banks: Some are big banks and some are small banks
  2. Customer owned banks: Credit Unions, Mutual Banks, and Credit Unions
  3. Non-banking lenders: Like Pepper Money, La Trobe, and Bluestone

Major Banks

Everyone is pretty much familiar with major banks. There are 2 kinds of major banks in Australia:

  • the Big 4: ANZ, Commonwealth Bank (CBA), NAB, and Westpac
  • not so big banks: St. George, Bankwest, BOQ, Bendigo, Suncorp, ING, Ubank, HSBC, Citi, Bank of Melbourne, Bank SA, RAMS

It is a fact that Big 4 banks and their subsidiaries (St, George, RAMS, BoM, Bankwest, Ubank,) collectively dominate the mortgage market with over 80% of market share. But it's also a fact that the BIG 4's got the worst customer satisfaction record compared with customer owned banks.

The following was published by Roy Morgan Research on the 28th of November 28, 2016.

Check out the competition. Banks, Customer owned banks and other institutions

Almost all major banks do distribute their mortgages via the mortgage brokers.

Customer owned banks

With so many issues related to major banks, there's never been a better time to check out the competition by the customer owned banking sector.

Some insights:

  • Together there are about 80 customer owned banks across all over Australia
  • Customer owned banks include:
  • Mutual Banks
  • Credit Unions
  • Building Societies
  • Collectively more than 4 million Australian customers bank with customer owned banks
  • Not all customer owned banks are represented by mortgage brokers

Customer owned banks are strong and safe alternatives to the big banks. These banks are big on giving back to the community and helping them grow. In other words profits are generally reinvested into communities whereas big banks distribute profits to their shareholders.

To name some well-known customer owned banks:

  • Credit Union Australia (CUA), Gateway Credit Union, Community First Credit Union, Bank Australia, Beyond Bank, Teachers Mutual Bank, Heritage Bank, Australian Military Bank, and IMBank.

Non-banking lenders

Non-banking lenders such as Pepper Money, Bluestone, Liberty, and La Trobe are all specialised mortgage lenders. In certain instances due to unplanned life events, borrowers could have had their creditworthiness decline over time from prime to what bankers call sub-prime. In these instances, these non-banking lenders could provide support.

These non-banking lenders are still regulated and need to follow responsible lending guidelines.

Why it's important to check out the competition?

If your circumstances are:

  • Good, proven income (declared to the ATO) and savings history
  • Not overly leveraged or not too much debt
  • A good credit history: no paid or unpaid defaults and not many missed payments
  • The house, apartment, or land is not restrictive (no caveats, council issues etc.)

The answer is pretty simple. Check out the competition to:

  • Get a better home loan rate - Saving your hard earned money
  • Better suited products to meet your current and future plans
  • Exceptional customer service

Remember when borrowing money for a property that the banks are giving you money. A mortgage is not something you wear like an accessory, so it doesn't need to be the biggest bank who you go and apply for a mortgage.