More competition for mortgages needed

mortgage/bonds/government/chief-executive/

15 August 2008
| By Benjamin Levy |
image
image
expand image

Phil Naylor

The Mortgage and Finance Association of Australia (MFAA) will step up its push for the Government to establish a government-backed source of funding for lenders, securing competition in the banking and non-banking sectors.

Phil Naylor, the chief executive of the MFAA, said: “Competition in the market puts downward pressure on rates and helps to ensure that consumers get better variety and choice of home loans.

“We need securitised sources of funding to keep competition alive. The lack of available credit at the moment has the ability to severely impact non-bank lenders in particular, because they don’t take deposits from their customers like the banks do,” he said.

The MFAA will argue its case in a verbal submission to the House of Representatives Standing Committee on Economics.

“We are calling on the Government to give serious consideration to establishing an Australian version of the Canadian Mortgage Bonds program,” Naylor said.

The Canadian mortgage scheme was introduced to allow smaller financial institutions to provide housing finance at comparable rates to larger institutions by providing high quality securities that are backed by a government guarantee.

“The Canadian model improves competition and is an active move by the Government to lower mortgage rates to the consumer. We think this is needed in Australia to ensure competition flourishes,” Naylor said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 4 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

5 months ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 6 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 4 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 2 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND