Investors turning towards smaller banks and lenders

Major banks have dipped slightly out of favour, with property buyers financed with non-major lenders now making up one in every six residential home loan across the country, a new data analysis has found.

RateCity, referring to an analysis of Australian Prudential Regulation Authority data, said that the big four banks collectively lost 0.52% market share to smaller banks and lenders.

This change is largely due to ramped up competition, incentives and discount rates on offer from non-major lenders, said RateCity CEO Alex Pasons.

“Although the major banks still hold the lion’s share of the home loan market, that’s slowly shifting as more people realise that smaller lenders, in the most part, offer better rates – often with the service to match,” he said.

“People are getting smarter with their home loans and realising that paying the higher rates is a waste of their money.”

Some mortgage providers off rates at 4.55% on variable loans. The average of the big four banks for variable rates is 5.24% or 5.04% with package discounts.