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Jessica Darnbrough
Lenders who seek to differentiate themselves on service alone are fighting a losing battle, one industry stalwart has claimed.
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Speaking to The Adviser, Yellow Brick Road’s executive chairman Mark Bouris said Australians are, more than ever before, looking for a bargain and want a good rate when it comes to their mortgage.
“A mortgage is the biggest financial investment you’ll ever make, so people want a good price. And they don’t just want a good price in the first year, they want it every year for the life of their loan,” he said.
“I have been in this industry a long time, and I know one thing for sure: when there is an oligopoly, lenders will set their stall up on service – they will advertise their service proposition, but nothing beats a reduced rate.”
Mr Bouris said if Australia’s non-bank lenders and credit unions ever wanted to step up and strip market share away from the big four, they had to be willing to compete with the big players on price – otherwise, they run the risk of being left behind.
“If you want to dislodge the incumbents, you have to offer the same products with sharper pricing,” he said.
Mr Bouris said this is what Yellow Brick Road had done recently thanks to its strategic alliance with Macquarie.
“In a certain aspect of the market, we offer the cheapest rate. No one can best us on rate and that is starting to pay dividends for us. Month on month, we are improving. Settlement figures doubled in November in comparison to October and I expect them to be a further 50 per cent up again in December.”
