Aussie Home Loans

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The online digital home loan platform Lendi and Aussie Home Loans have announced they have entered into an agreement to merge.

It has been mooted for a month.

The financial press had advised Aussie has 200 outlets and a $70 billion loan book that makes $50 million a year profit while Lendi is a loss maker, recently advising a $37 million loss with an $8 billion book.

Aussie has around 1000 brokers, and Lendi has around 200.

They intend for the proposed merger to "create a market leader in the Australian home loan market."

Lendi shareholders will hold the majority shareholding of 55 percent in the merged business, while Aussie’s current owner, CBA, will hold a 45 percent shareholding.

It will continue to provide funding for the Aussie Select branded home loan product.

The CBA chief executive officer, Matt Comyn said the combined business will have a stronger platform to offer "enhanced digital capabilities for Aussie brokers and a superior experience for customers."

Lendi CEO and co-founder David Hyman suggested it was an "exceptional opportunity" to drive the growth and digitisation of the two companies, both of which had "led disruptive change" in the Australian home loan market. 

Aussie CEO James Symond suggested the merger was another important step in the almost 29-year evolution of Aussie as Australia’s leading retail mortgage broker.

"We are currently posting record lending volumes through our network of over 970 brokers and over 210 stores and, by underpinning Lendi’s technology across our national broker network, we will further accelerate this growth and momentum.”

Completion of the transaction is subject to ACCC approval and other customary conditions.

It is expected to occur by mid calendar year 2021.
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The Commonwealth Bank has announced the merger of its Aussie Home Loans business with online platform Lendi

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Aussie Home Loans merges with Lendi

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New research from Aussie home loans has revealed that uncertainty arising as a result of the ongoing COVID-19 pandemic is leading two thirds (65%) of Australians with property plans to lose confidence in their ability to achieve their property goals.
Consumer confidence in the property market has also collapsed from 76 percent in January of this year, to just 46 percent in June.
More than 6 in 10 – or 61 percent – of respondents further indicated that the pandemic has resulted in changes to their property plans, including a third (35%) who say they have delayed them.
The research, commissioned by leading mortgage broker Aussie, asked the same questions of Australians pre-pandemic in January, and again in June, highlighting the doubt COVID-19 has cast over Australians’ plans to buy or refinance their homes.
Despite the uncertainties, 42 percent of Australians said they want to take advantage of the market, but do not know how. This has led to over half (54%) wanting more guidance when it comes to their property and finances, while a third (36%) said they would be more likely to engage a broker now to help them better navigate the property market. 
Aussie customer data supports the statistics, with enquires remaining relatively steady. Aussie saw a 1.8 percent increase between January to July 2020, relative to the same time period last year, while lodgements are up 16 percent year-on-year, showing that that many Australians are looking for ways to navigate the current environment to see how they can make their property plans a reality.
Aussie Chief Executive Officer, James Symond, said the strong number of enquiries shows that there is still interest in the market.
“There are many opportunities available right now that could make it favourable for Australians to enter the market, invest, downsize or refinance, including lender cashback incentives, reduced interest rates and government initiatives, such as the First Home Owner Grant, the $25,000 HomeBuilder grant, and the First Home Loan Deposit Scheme (FHLDS),” Symond said.
“During what has been a challenging time for many Australians, including a change in personal circumstances or financial outlook for some, brokers have an important role to play in helping Australians understand their options and make smart choices to keep their property goals on track,” he concluded.
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Two thirds of Australian lack property confidence during COVID-19: Aussie

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Australian mortgage broker, Aussie, has launched a major expansion plan to recruit 200 new brokers in 2020 and increase retail stores to 300 nationally by 2023, as its business model proves to be resilient during the COVID-19 crisis.
“Our brokers are self-employed, however they are far from operating alone. We have always provided industry leading training, support, and mentoring to help them get their businesses up and running. We believe providing our newest brokers remuneration during this period will help give them the kick start they need to become successful and long-term brokers with Aussie,” said Aussie CEO James Symond.
On the successful completion of the training program, recruits will be qualified for a Certificate IV in Mortgage Broking and could be on their way to a full Diploma in Mortgage Broking over a 12-month period.
“We’re delighted to be providing people the opportunity to gain new skills and qualifications, particularly during this time,” added Mr Symond.
The recruitment campaign is part of Aussie’s larger investment campaign into technology, marketing, and broker support.
“We are increasingly receiving inquiries from new and existing customers keen to take advantage of historically low interest rates and understand their options,” Mr Symond concluded.
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Mortgage broker Aussie launch major expansion plan

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First home buyers are the big winners from the latest RBA rate cut, says James Symond, chief executive of mortgage broker Aussie.
Symond said first home buyers now have an even greater opportunity to break in to the market.
"While there are thousands of low rate home loan products available for first home buyers, ranging from basic loans to more sophisticated offerings, first home buyers need to be properly informed before committing themselves to a long term financial commitment", Symond says.
<div>Symond has shared his seven top tips for first home buyers.</div>
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<div>1. Work out how much you can afford to spend before you start, research price ranges in the suburbs where you want to purchase and ask an expert to help you</div>
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<div>2. Speak with an Aussie mortgage broker to help you decide what loan product suits your needs – especially your borrowing limit. When finding the best home loan for you, check out the ongoing payments, especially in the fine print for monthly service fees and other charges, and what they could become when rates inevitably rise</div>
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<div>3. If you are worried about potential rises in interest rate and repayments, you could split your loan between variable and fixed rates</div>
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<div>4. Remember a low start-up interest rate or honeymoon rate does not necessarily mean you will be paying less for your property in the long term</div>
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<div>5. Make sure you can still enjoy a great lifestyle after regular mortgage repayments.</div>
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<div>6. Get assistance and pre-approval for a loan, which Aussie can provide, so you know exactly what you can afford. 
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<div>7. Be aware you can get a loan under the Federal Government First Home Loan Deposit Scheme, allowing property purchases with a deposit of just 5 per cent. Another allocation of 10,000 loans in the scheme is expected to be made from 1 July 2020. </div>
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First home buyer activity to be lifted by interest rate cuts: Aussie CEO James Symonds' top tips

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The consumer group Choice have gone straight to ASIC to complain about the use of certain terms in Aussie Home Loans promotions of their mortgage rates.
Choice claims Aussie spent $25m promoting its services between 2016 and 2018, and relied on guarantees such as finding consumers the “perfect loan”, “best deal”, and “best mortgage rate”.
Choice said the language used misrepresents how mortgage brokers work.
 
Aussie CEO James Symonds, son of Aussie founder John Symonds, told the Daily Telegraph he couldn't recall the brand using the terms "perfect" or "best" in any recent ad campaigns.
He also said it was “crazy” that consumer group Choice hadn’t brought its concerns to Aussie first.
Choice CEO Alan Kirkland said the company are concerned people who had seen the ads will have likely formed the "incorrect impression that mortgage brokers will scan the market to find them a high-quality loan."
 
 
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Choice consumer group lodge complaint to ASIC on Aussie Home Loans advertising

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The number of same sex home loans are on the rise, according to new data from mortgage broker Aussie Home Loans.
The research shows that women are more likely than men to partner up to buy a home. Female couples made up 55 percent of same-sex joint loans taken out in FY18, up from 50 percent in FY14.
There has also been a gradual increase in the number of single female loans compared with single male loans.
Inner-west suburbs of Melbourne and Sydney are the most popular for same-sex couples.
New South Wales is the most popular among male couples, with six of the top nine suburbs coming from the Harbour capital.
Redfern, Surry Hills and Erskineville are the most popular areas for male couples in New South Wales. In Melbourne Footscray, Prahran and Coburg are the most popular.
It's the opposite for female same-sex loans. The most popular areas in Melbourne, who have the six most popular suburbs to Sydney's three.
They're looking at property in Brunswick, Craigieburn and Yarraville, while Randwick, Stanmore and Marrickville are the most popular in inner Sydney.
James Symond, CEO of Aussie Home Loans, said he expects to see significant growth from same-sex loans.
“We are delighted to be providing more loans to same-sex joint applicants, whether they are couples or singles partnering up," he said.
"I expect to see significant growth from these customers for years to come thanks to the legalisation of same-sex marriage and savvy singles - and in particular women - who are looking to join forces to get a foot on the property ladder.
“No matter if you are single, a couple or buying with a friend, nothing beats a quality, face-to-face conversation when you are talking about a big commitment like a home loan.
"There’s a bit of doom and gloom out there about how difficult it can be, but we think it’s better with a broker. So don’t assume buying a property is a million miles away – it could be closer than you think.
“In fact, I’m so confident an appointment with an Aussie Broker will be time well spent, I guarantee it. If, after meeting with one of our brokers, a customer does not think it was worth their while, $100 is theirs*,” he added. 
Aussie data also reveals that all female home loans (single and joint same-sex) are settled at an average age of 41 years, compared to 38 years for all male loans. The average age for joint mixed gender loan customers is 40 years. 
Men consistently borrow more than women, with single and joint male loan sizes averaging $293,619 and $337,182 respectively, compared to $262,591 and $316,405 for single and same-sex females.
 “There is unfortunately a clear disparity between men and women in home loans, which I believe can be linked back to a persistent income gap," Symond said.
“Our data shows the average individual income for single male customers is 17 per cent higher than single females, and 12 per cent higher for joint same-sex customers.
"That’s not an insignificant amount, and could ultimately be the cause of women’s delayed entry into property.”
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Same sex home loans on the rise: Aussie Home Loans

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Households in Sydney are generally dedicating the largest proportion of their annual incomes to service a mortgage, with the typical household dedicating 49% of their annual income to mortgage repayments, according to a report released last month by AHL Investments (Aussie Home Loans).
Darwin households generally show the lowest proportions of annual income that is dedicated to mortgage repayments, with 22% of annual household income being used to pay down mortgage debt.
Mortgage serviceability rates have improved since 2008, when the average household was dedicating 51% of their annual gross income to servicing a mortgage.
Mortgage serviceability data extends back to 2001 when the typical household was dedicating a much smaller proportion of their household income to service a mortgage, the Aussie report noted.
In 2001, households were dedicating an average of 26% of their gross annual income to mortgage repayments.
<img src="https://www.urban.com.au/images/2018/7/6/Aussie%20Graph%204-2.JPG" alt="">
As housing values and interest rates moved higher, serviceability became more challenging, with the average proportion of household income required to service a mortgage reaching a peak of 51% in June 2008.
Despite dwelling values generally moving higher over the most recent five year period, mortgage serviceability has held reasonably firm thanks to mortgage rates trending lower.
Of course, as households reduce their principal loan amount, serviceability will improve.
With so much variance in the value of dwellings across the regions of Australia, mortgage serviceability measures show a broad range across the cities.
<img src="https://www.urban.com.au/images/2018/7/6/Aussie%20Graph%204-1.JPG" alt="">
 
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Sydney trumps all in mortgage servicability hurdles over the past 25 years: Aussie/Corelogic

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The average size of the Australian home loan has increased by 376% over the past 25 years.
The average loan size has broadly increased in line with dwelling prices across Australia, with the typical loan size reaching $388,100 in 2018 according to a report released last month by AHL Investments (Aussie Home Loans).
<img src="https://www.urban.com.au/images/2018/6/28/Aussie/Aussie%20Graph%203-1.JPG" alt="">
"The average size of a mortgage across Australia has increased roughly in line with dwelling values over the past quarter of a century, with the annual rate of increase tracking at 6.4% per annum compared with national house values rising at 6.8% per annum and national unit values rising at 5.9%," the report stated
The average loan size for owner occupiers across Australia, based on data to March 2018, was $388,100, having increased from just $81,500 25 years ago.
The report notes it was not surprising to see a wide range in the average loan size between the states which is reflective of the diversity in housing values.
"The largest loan sizes are originating in New South Wales where housing values tend to be the highest, while average loan sizes are the smallest in Tasmania at just $252,100."
<img src="https://www.urban.com.au/images/2018/6/28/Aussie/Aussie%20Graph%203-2.JPG" alt="">
Despite loan sizes increasing approximately in line with the housing cycles, mortgage rates have fallen dramatically over the same time frame, which has resulted in improved levels of mortgage affordability.
Some 25 years ago, the average standard variable mortgage rate was recorded at 10.0% compared with an average standard variable mortgage rate of 5.2% in April 2018.
<img src="https://www.urban.com.au/images/2018/6/28/Aussie/Aussie%20Graph%203-3.JPG" alt="">
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How the typical Aussie mortgage has risen over past 25 years: Aussie/CoreLogic

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Fraud at Aussie Home Loans will be examined by the banking royal commission’s first public hearing later this month.
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The financial services royal commission is targeting lenders over alleged cases of home loan fraud, along with unsuitable credit card limit increases and their car financing practices.
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The big four banks will all feature prominently in the inquiry's first round of public hearings focusing on inappropriate or unsuitable lending in home loans.
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The commission's target will be "fraudulent brokers and broker arrangements" at Aussie Home Loans.
It will look at the Commonwealth Bank's "accreditation of brokers and broker arrangements".
It will look at NAB's "Introducer Program and fraudulent loan applications".
The Introducer Program was rewarding "introducers" who successfully referred people to the bank for a loan, despite many of the applications being submitted with false information including doctored payslips. 
The bank issued 2300 home loans, which mainly went to foreign buyers of Australian property sold via "introducers."
Twenty bankers were caught breaching lending policies.
The hearings will be held in Melbourne from March 13 until March 23.
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NAB and Aussie Home Loans fraud to be examined by banking royal commision

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"Aussie" John Symond's ownership of his mortgage broking empire has come to an end. 
The Commonwealth Bank of Australia has finalised the purchase of Symond's remaining 20 per cent stake in Aussie.
The Australian Financial Review says the price eclipsed initial expectations. 
The payment, which was made via 2.1 million CBA shares at $78.54 apiece, came in at almost $164 million.
It was well ahead of initial expectations of as much as $90 million.
Symond is said to have been given the option to take stock or cash this time round, but opted for the former as he did in previous sell downs. 
Sources said he had confidence in the domestic banking system and CBA's prospects, despite the bank's AUSTRAC and regulatory woes. 
Street Talk said the last time CBA moved on Aussie was in 2012 when it increased its holding from 33 per cent to 80 per cent.
That deal was said to value the broker at $420 million, whereas the latest sell down delivers Aussie an $820 million valuation.
CBA's latest results showed home loans originated through its proprietary channels, such as branches, accounted for 57 per cent of new mortgages as at June 30. Loans through brokers sat at 43 per cent.  
It reflected a move away from broker originated loans when the split between the two channels was 50 per cent each just a year ago.
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