Non-bank lenders hitting their stride

Kim Cannon, CEO of non-bank lender FirstMac, says the sector is “returning from the abyss” following its decision to take on the major banks with an online mortgage product.

Cannon expects as slow recovery for the non-bank sector, but believes things have turned around.

“It’s getting better every day,” Cannon says. “Pricing [of securitisations bonds] was the issue during the GFC crisis. But this has come back, though investors remain domestic-based.

Cannon heads to Brussels next week to attend the European Securitisation forum and “see what the mood is like” from overseas investors.

Brisbane-based FirstMac is offering mortgages through its loans.com.au brand.

Cannon told Property Observer he had been holding onto the brand for the last 13 years waiting for the right moment to offer it to the market.

“We have been waiting for right time, when we believe people will transact online. Since the emergence of the iPad and iPhone, people have become more dependent on the internet to do their shopping and product comparisons,” he says.

Cannon says mortgage brokers’ “love affair with the major banks” had pushed FirstMac to pursue an online route.

Research carried out by FirstMac has discovered that its target market for the product is not Gen Y borrowers, but 40- to 50-year-olds. “It’s quite the opposite of what we thought,” he says.

Recently, fellow non-bank lender Pepper Home Loans, predominantly a specialist lender, snapped up GE Money’s $5 billion loan book. The company will use the acquisition to move into the prime residential space.

Loans.com.au’s Dream Loan express is currently offered at a discounted rate of 6.58%, just lower than NAB’s UBank standard variable, available at 6.59%.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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