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Brokers from a major aggregator wrote the same volume of branded home loans in November as they did for a major bank, reflecting the growing success of the group’s white-label offering.
The most recent AFG Competition Index shows that AFG Home Loans – the group’s branded white-label products – accounted for 8.23 per cent of all mortgages written in November. By contrast, Westpac received the same share of home loans over the month (8.23 per cent).
The popularity of AFG branded mortgages has risen dramatically over the last 12 months and has consistently outperformed all non-major lenders in terms of share of AFG broker-originated loans.
In December 2015 AFG Home Loans accounted for 5.52 per cent of all mortgages. In April 2016, AFG Home Loans commanded a 6.96 per cent share of all mortgages. This jumped to 7.33 per cent in June before reaching a high of 8.23 per cent in November.
Branded mortgages added $6.6 million in profit to the group over the 2016 financial year.
AFG has repeatedly stated that the core objective of its white-label business is to maintain multiple funding lines.
One of its major funders is Advantedge, a group that has been instrumental in the development of white-label lending in Australia.
Advantedge general manager Brett Halliwell said brokers have largely “jumped on board” with white-label lending over the last 12 months, which has led to a significant increase in volumes for the funder.
“In 2016 we really saw the absolute take-up of white-label lending. It has just been an absolute runaway success within the industry,” Mr Halliwell said.
In 2015 Advantedge rolled out a number of white-label offerings through its aggregation partners including FAST, Choice, PLAN and AFG.
“We're absolutely delighted to see that the take-up across all of those new aggregators, plus our existing partners, was very strong,” Mr Halliwell said.
“We hoped that it would be that strong and we hoped that it would be that positive, but I think that really sent a strong message that what we had set out to deliver to brokers, to deliver to their customers, means they understood it, they got it, they jumped on board,” he said.
“We're absolutely delighted with a very significant increase in volume across our business in general.”
[Related: Major broker's branded home loans surge 99% towards $2bn]
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James Mitchell
AUTHOR
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.