Yellow Brick Road's plans to take on the major banks.
Mortgage lender Yellow Brick Road is planning to double its monthly sales of new home loans by the end of the year, believing this will add more competition to the mortgage market and forcing the big banks to act and cut their home loan rates, according to the News Limited Network.
There has been much bustle recently around the largely unknown hold on the Australian banking and home loan markets by the Big Four banks. Recent findings highlighted many Australians are unaware of the Big Four banks stakes in multiple smaller brands, such as the recent takeover of Aussie home loans by the Commonwealth Bank. On the back of the growing concern, many will be supporting any new challengers to the market.
Although currently only holding a minor share of Australia's $1.1trillion home loan market, executive chairman of Yellow Brick Road, Mark Bouris, believes his company is on track to offer a significant contribution to the scene. With a new backing from Macquarie since last year the network of brokers is making an aggressive push to secure new customers by offering discounts on loans. A quick search on Mozo's database shows the lender offering variable loans starting from as low as 5.25 percent. The cheapest variable loan currently available on the market is 4.99%
Mr Bouris believes the Yellow Brick Road needs at least 5 to 10 percent of the market before it will have any impact of the banks.
"If we can take market share from them, it becomes a volume game. They will have to fight back on volume, and to fight back on volume you have to fight back with pricing," he said.
The challenge comes at a point when Australia's banks are already offering record low home loans in an attempt to stimulate the market which has been growing at its slowest pace on record.
Australian Competition and Consumer Commission chairman Rod Sim last month pointed to the Yellow Brick Road's partnership with Macquarie as a positive development for the sector that made him "a little bit optimistic" about the state of competition in banking, reports the Newcastle Herald.
Potential homeowners and those looking to refinance can compare Yellow Brick Road and multiple other lenders, including the major banks, to find Australia's best home loan deals on Mozo.
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