By Graeme Salt
You want to buy a house; your first call is often to your bank.
But increasingly, many non-bank lenders are finding solutions to would-be home buyers when the bank says no.
Sometimes, highly-regulated banks just won’t lend you enough for the expensive Australian property markets.
This image shows the borrowing capacity of a PAYG couple hoping to:
- Borrow close to $1m
- Keep their existing home
- Turn it into a rental property
The banks couldn’t get close (about $775k) as the banking regulator forces them to be more conservative.
Many of these non-bank lenders are household names like Liberty or La Trobe. Some, like Pepper, are even listed on the Australian Stock Exchange (ASX)
And their rates are not bad either – some are as low as 6.29 per cent.
Increasingly, Australian homebuyers are turning to non-bank lenders – who are often more creative. Another loan I am working on currently is a 60-year-old self-employed person who wants a 25-year mortgage.
Increasingly Wall Street Titans are investing in Australian lenders, superseding banks;
- HSBC offloaded its $36 billion Australian home loan portfolio to Wall Street’s largest private equity player Blackstone
- Westpac sold its $15.4 billion RAMS mortgage portfolio to a consortium made up of KKR and fixed income giant PIMCO.
Most of these non-bank lenders only go through mortgage brokers. And now about eight out of ten of all mortgages come through brokers.
Pepper recently reported to the ASX a 15 per cent lift in first-half profit to $54 million, and said inquiries were up 11 per cent since Labor made significant changes to property tax concessions in May.
So, if you are struggling to buy a home, the non-bank lenders may be your answer.
Graeme Salt is an award-winning mortgage broker. For a no-obligations consultation on your home loan needs, please contact him on 02 9922 5055.
