Heritage Building Society has severed its lending relationship with all but a few mortgage aggregators. A number of aggregators were contacted by Heritage in January to inform them of the decision.
The move from Heritage is one of several big changes to the Mortgage Broker landscape of late. RAMS recently exited the broker channel and several lenders have either raised or lowered the LVRs on their mortgage products.
Heritage’s decision is likely related to the federal government’s announcement that it is changing the wholesale funding guarantee scheme. The changes will mean that many non-bank lenders may be forced to scale back their residential and business lending.
The guarantee provides insurance to lenders on funds obtained on the wholesale funding market rather than by deposit taking.
Heritage is not pulling out of the mortgage broker market completely and will maintain its relationship with several key aggregators. Mortgage brokers have voiced their opinions and stated that the move by Australia’s largest building society will not affect business as they rarely used Heritage’s products due to their stringent criteria.
Due to the current strength of the Australian property market and the generally positive outlook for the economy it is expected that other non-bank lenders will fill the void left by Heritage’s decision.
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