 The battlefield of mortgage lenders
Are the smaller banks fighting back? Or is the home loan market still dominated by the Big Four?
According to data from Mortgage Choice, while the big banks are dominating, the share held by the smaller banks rose in the March and June quarters.
Mortgage Choice reported that loans advanced by big four banks accounted for 75 per cent of its settlements in the December quarter but fell slightly to 71 per cent in the March quarter and 60 per cent in the June quarter.
“Other bank” share rose from 21 to 33 per cent over the same period, while building societies and “other lenders” also gained share .
Mortgage Choice chief executive, Michael Russell, sees lenders bringing back more aggressive loan products such as discounted loans and Rate Trackers.
Competition has reduced because funding has reduced and the big banks have an advantage of cheaper funding costs. Recently, there have been several takeovers and acquisitions, with NAB purchasing Challenger Group and The Commonwealth Bank acquiring Wizard Home Loans.
Recently, industry voices backed the general public's concern over the Big Four having such a large competitive advantage in the home loan market. Even the Reserve Bank of Australia expressed concerns over the dominance of the larger banks.
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