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The big four banks are losing ground in the fixed rate home loan space, as the non-majors double their market share in just six months.
According to the latest AFG Competition Index, non-major lenders accounted for 15.5 per cent of fixed rate loans in March 2013, but this figure rose to 29.2 per cent during September.
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The majors didn’t just lose ground in the fixed rate space, the second-tier banks also caught up in residential mortgages overall.
Non-majors accounted for 26.3 per cent of all new home loans at the end of September, compared with 24.5 per cent in June and 20.6 per cent in March this year.
Mark Hewitt, general manager of sales and operations, said non-major lenders were the reason competition in the mortgage market is so fierce.
“They are continuing to put pressure on major lenders, who have been compelled to respond. This has resulted in unprecedented levels of discounting, with the clear winner being the borrower,” he said.
With borrowers looking to refinance to a fixed loan, it’s no wonder the non-majors saw the most growth in this borrower demographic. However, the major banks are still dominating the investor marketplace despite market share dropping from 79.9 per cent in March to 76 per cent in October.
Non-major lenders further grew their penetration of the first home buyer market, which has traditionally been their greatest support base, from 25.6 per cent in June to 26.8 per cent in September.
According to AFG, ING took the lead among non-majors for fixed interest products, achieving an 8.2 per cent market share in this category during September - and a double-digit 11.0 per cent in July.
Macquarie Bank accounted for 10 per cent of refinancing deals in September, consolidating its sustained growth this year while Suncorp continues to show strength across all buyer categories.
