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An emerging mortgage technology has been hailed as a way for smaller lenders to “capture a greater share of the market” from the big four.
Electronic conveyancing will significantly reduce the cost and time of the mortgage process, according to PEXA, the government agency that is overseeing the rollout of a national system.
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PEXA told the Financial System Inquiry that e-conveyancing would allow unencumbered property purchases with available funds to be settled “within days rather than months”.
It also estimated that the conveyancing costs associated with buying or selling a property would fall by $120 to $150 per transaction.
PEXA said e-conveyancing would boost mortgage competition by reducing any scale-cost advantages that the major banks have in processing mortgages.
It also said the introduction of electronic mortgages with standardised terms and conditions would allow greater transportability of mortgages and make it harder for banks to impede customers who want to refinance.
“Refinancing will be considerably easier and rates likely to be more competitive from smaller financial institutions,” the submission said.
PEXA forecast that a national e-conveyancing system would allow smaller lenders to “capture a greater share of the market” from the big four banks.
“Smaller banks and non-bank financial institutions see e-conveyancing, standardised mortgage discharge authorities and e-mortgages - with the appropriate protocols agreed - as solutions to reduce the barriers to lending and increase competition for mortgages,” it said.
By the end of 2015, all states except the ACT will be part of a national e-conveyancing system and will have completed the appropriate systems upgrades, according to PEXA.
[Related: Conveyancer promises faster settlements]
