In Australia, the broker channel is very important for mortgage applications. According to the Australian Prudential Regulation Authority around 1 in 2 new mortgages originate through brokers. It is therefore unsurprising that there has been an increase in the number of digital entrants to the market. One of the most recent examples is Uno, which recently received a $16.5 million investment from Westpac. RFi Group data, from March 2017, shows that 4% of borrowers have applied for a mortgage through a digital broker and 6% would do so for a future mortgage. This suggests that thus far this channel has been growing at a slow pace, given the relatively new emergence.
RFi Group data, from March 2017, shows that 4% of borrowers have applied for a mortgage through a digital broker and 6% would do so for a future mortgage.
However, this may soon change given that the two largest online real estate platforms in the nation will enter this space. REA Group has announced that realestate.com.au will acquire a majority stake in mortgage brokerage franchise Smartline. Furthermore, realestate.com.au has entered into a strategic partnership with NAB to create an end-to-end digital property search and financing platform. Separate to this, Domain Group has also announced the launch of Domain Loan Finder with digital mortgage platform Lendi, allowing prospective borrowers to connect with over 30 lenders as well as mortgage specialists for their expertise. The new entrants may have the necessary funding and infrastructure to scale operations very quickly. Furthermore, offering customers a true end-to-end digital home buying experience could have significant impact both on the market as a whole.
Source: RFi Group Australian Mortgages Council, March 2017