Commonwealth Bank and Macquarie are likely to be the last two lenders left standing as other major banks continue to suffer heavy casualties from the vicious mortgage war that has erupted this year.
Already there are signs that some lenders – such as National Australia Bank – are losing their appetite for a frenzied fight over market share, and are instead focusing more on pricing. About three-quarters of the home loans that banks now write come through broker channels, and only one-quarter is proprietary.And the battle for market share has resulted in an explosion of cashback offers to new borrowers.
In its full-year results, NAB said 54 per cent of its home loan book came through the proprietary channel, and 46 per cent from the broker network as at the end of September 2022. So, the economics of home lending has to include some calculation of how likely the borrower is to stick around. And that in turn reflects whether the bank can establish a closer connection with its customer.Even though Macquarie is very dependent on brokers for sourcing new home loan customers, the Sydney-based bank has a finely honed strategy for retaining them., with lower debt-to income levels and larger equity buffers, and is prepared to offer keenly priced loans to attract their business.
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