MFAA backs Government efforts to boost competition

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The MFAA, Mortgage and Finance Association of AustraliaThe Mortgage and Finance Association of Australia (MFAA) today welcomed reports that the Federal Government is examining ways to help make non-bank lenders more competitive in the mortgage market.

Treasury officials are said to be preparing options that will make it easier for regional banks and non-bank lenders to access funds and therefore to offer lower mortgage rates.

“The possibility of Federal Government support is appropriate and welcome,” said Phil Naylor, CEO of the MFAA.

“Australian consumers have, over the last decade or so, benefited demonstrably from the competition provided by non-bank lenders in the mortgage market.

“Interest rates were probably two percentage points or more lower than they would have otherwise been, and a far wider range of products was available for borrowers.

“However that has all but disappeared with the collapse of securitisation.

“Reserve Bank data shows that the difference between its cash rate and the standard variable rate charged by the major banks is increasing for the first time in nearly 20 years; this is not good for homebuyers.”

The government has already invested $8 billion in mortgage-backed securities — which Mr Naylor described as “a welcome kick-start” – and is reportedly considering expanding this program to $30 billion.

“I appreciate the government’s recognition that more needs to be done; Government intervention in the market is not ordinarily welcome or appropriate.

“But in such extraordinary times — when it’s clear that the Australian lending market is no longer operating competitively to the benefit of borrowers – it’s appropriate for the government to intervene with steps to improve competition,” he said.

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3 COMMENTS

  1. PHil, you dill , there is a cometative alternative !!!! some of the non -bank lenders are still out there and operating with rates that can be similar to the variabke rate, they fall down on fixed rate,

    Be careful Phil some of these Non Bank lenders are a major sponsor of the MFAA , give them some acknowledgement please < Note I am not an employee of Challenger !!!, but a mortgage manager who STILL uses them and some others .

  2. I welcome Mr Naylor’s input to this topic and encourage him to kick and bite and pinch and squeal and carry on like a real girl. Throw everything at the major banks please Mr Naylor and support your argument with every peice of data you can lay your hands on.

    And tell the public what you are doing. Media releases, get your big ugly dial on as many news reports as you can. Show the public that the reason the banks are increasing their interest rates at this very moment is because there is no longer any competition. Tell the public that the banks are putting up their interest rates “just because they can”. Of course the banks will say that their costs have gone up, but that is mainly “the excuse”, the cover in order to increase their profits.

    I will make a small wager that the 4 Australian major banks will show very substantial increases in profits next year “despite very difficult trading conditions”. Yeah, right!!!!!!

    Have a good weekend everybody.

    Keith

  3. Well done MFAA, keep lobbying as your voice seems to b getting through. Nick Sherry at the MFAA Conference clearly endorsed the good work being done by the MFAA.

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