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Brokers continue to back non-bank products, the latest quarterly sentiment survey by The Adviser has shown.
Seventy-seven per cent of survey respondents still believe they will recommend a non-bank product over the coming quarter, an increase of two per cent over the previous quarter.
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Support for the sector continues despite recent uncertainty over the impact of deferred establishment fees (DEFs) and concern over clawbacks.
“Support for non-banks stems from the fact that they are independent and allow the mortgage originator to continue to look after the borrower after the loan has settled,” said Allan Savins, chief operating officer of RESIMAC.
“This complements the faster approval times, wider product range, and long term dedication to the third party distribution sector.
“The core value proposition that non-bank lenders offer their customers includes superior service and a broader product offering. Non-banks can provide their clients with significantly faster loan approvals, and better post settlement borrower support.
“In terms of product offering, non-banks offer a wider array of loans which cater for the diverse needs of borrowers including the self-employed and credit impaired, in addition to the traditional borrower segments.”
Despite the customer benefit of many non-bank products and service propositions, concerns remain about their ability to compete with the banks long-term on price.
However, Mr Savins is optimistic: “Non-bank lenders were responsible for bringing price competition to the mortgage industry, and will continue to do so in the future,” he says.
In addition, the removal of Deferred Establishment Fees without any increase to interest rates will further enhance the non-bank offering and make it easier for non-bank lenders to write more loans.”
