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The Adviser talks to Mortgage Ezy CEO, Peter James to discuss the impact of APRA's changes on the investor and non-bank markets
Q1. Has APRA’s curbing of the investor lending created renewed interest in the non-bank sector?
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Yes, it certainly creates renewed interest in the non-bank sector, and provides a differentiation between approved deposit institutions (ADIs) and non-bank lenders. It’s also created a clear price advantage of non-banks over banks.
Q2. Does broker support of the nonbanks stimulate competition?
Obviously yes. Since the days of Aussie Home Loans, non-banks have provided the only meaningful competition to the big four. It’s been said that if the banks had been able to maintain the margins they had before non-bank lenders emerged, then current interest rates would be double. Lenders like Mortgage Ezy are innovative, nimble and flexible, giving a real choice in a vertically challenged market.
Q3. From where do you obtain your funds and how does this benefit your business?
We obtain our funding from the bond market and wholesale banks, which allows us to be the best of both worlds, providing balance sheet lending up to 80 per cent and very competitive interest rates.
Q4. What strategies do you employ to compete with the banking sector?
Mortgage Ezy does the lending the banks won’t and while they do plenty, we do it better. Our rates are significantly lower and our criteria are much more flexible. We do up to 85 per cent with no LMI or credit scoring, and even those with blemished credit ratings are welcome. At the same time, we compete head-to-head with the banks for the blue-chip client who is seeking a better deal.
Q5. How do you manage the perception that non-banks are lenders of last resort?
We won’t deal with aggregators or brokers that don’t promote us on our merits. We support brokers with low rates and the highest commissions and expect quality business in return. It is just simply not the case that we are lenders of last resort. Rather, as our name, Mortgage Ezy, implies, we are about cutting red-tape and being able to place almost every deal. This is why we welcome those less than perfect deals alongside the mainstream vanilla deals.
