Brokers on Non-Banks | Mortgage Professional Australia

 

Australia’s non-banks were supposed to be the fallback option, but the nation’s brokers have spent three years pushing them up the ladder. In the June 2026 quarter, non-banks grew more than 25 times faster than the banks that were supposed to keep them in that lane.

 

Non-bank lending rose 65.2% year-on-year to $10.49 billion, against the 2.6% growth managed by the major banks and other authorised deposit-taking institutions over the same period, according to data from the Australian Bureau of Statistics (ABS). Non-banks now hold 10.7% of new home lending value.

 

That growth came despite a broader market that cooled sharply. New loan commitments fell 5.4% in number and 5.2% in value from the June quarter, as the Reserve Bank of Australia raised the cash rate for a third time in 2026. The cash rate was lifted once again in September.

 

MPA’s Brokers on Non-Banks 2026 survey asked brokers to rate 12 qualifying non-banks across 10 categories, including two new entrants. 

 

 

MPA’s survey data shows 72.74% of brokers sent more business to non-banks this year than last, a third annual rise. Part of that is push, with bank credit tightening now brokers’ top reason for going non-bank. The rest is pull, which one broker explained: “Non-banks have filled the competitive gaps by taking a holistic view of self-employed borrowers, investors and niche property buyers, and they’ve been able to approve and process complex loans in hours.”

 

 

This matters at scale. Brokers facilitated a record-high 81.6% of new residential home loans in the June 2026 quarter, according to Cotality data commissioned by the MFAA. The association’s CEO, Anja Pannek, says the shift leaves significant opportunities for non-banks to build durable broker partnerships.

 

 

What separates this year’s winners isn’t complicated – it’s consistency, says Tanya Sale, CEO of Sydney-based aggregator outsource Financial. “The lenders that earn strong support from brokers are typically those that deliver on their turnaround times, apply credit policies consistently and keep brokers informed throughout the process,” she says.

 

Ask brokers what matters most, and the answer has barely moved in three years. BDM support, credit policy and turnaround times have held first, second and third place every year since 2024, a settled consensus from an audience that rarely agrees. Bluestone took gold in the first two this year, though turnaround times went to Prospa instead, the one gap in what would otherwise be a clean sweep of brokers’ top three priorities.

 

“My relationship with the BDM helps if I need anything done which is urgent,” one broker said. 

 

Brand is another story. Brand recognition sat tied for second as recently as 2023 and has finished dead last for three years since. A recognisable name buys far less broker trust than a credit assessor who picks up the phone. Clients are a different matter. Lack of brand awareness is still the second-biggest barrier to brokers sending non-banks more business. That’s where Pepper Money’s brand recognition gold counts, followed by Bluestone with silver and Liberty with bronze.

 

 

Growth, though, brings a cost. Broker sentiment on turnaround times reversed this year, and the brokers who explained why keep landing on the same cause: growth outpacing capacity. “A lot of second-tier lenders are being smashed with a lot of business that no longer qualifies with the majors,” a broker noted. 

 

For brokers deciding where to place their next scenario, a proven track record still counts, but so does asking any lender, winners included, how they’re managing this year’s growth.

 

 

 

 

The reasons brokers give have tilted towards necessity, but they’re just as clear about what non-banks are getting right.

 

 

• 72.74% of brokers sent more loans to non-banks than in the previous year, a third straight annual rise, though the increase slowed to 2.63 points from 3.37
• Bank credit tightening is now the top reason brokers choose a non-bank, cited by 31.12%
• Brokers still overestimate the shift: 35.91% forecast sending less than a fifth of loans to non-banks in 2026, but 44.75% actually did
• Bluestone took gold for credit policy, the second most important criterion for brokers

 

 

Brokers like to think they’re choosing non-banks. Increasingly, the banks are doing the choosing for them. Non-bank usage keeps setting records. In 2026, 72.74% of brokers say they sent more business to non-banks than the year before, a third straight annual rise and a new high for the survey, up from 70.11% in 2025 and 66.74% in 2024.

 

A closer look, though, reveals that the pace has slowed. Last year’s gain was 3.37 points, this year’s just 2.63. The rapid recovery that began in 2023 looks like it is settling into a steadier climb. Leo Gagic, the Melbourne-based CEO of FBAA, sees that as a strength, not a stall. “While the pace of expansion has moderated, that is a sign of market maturity rather than a ceiling being reached,” he says.

 

The banks’ own credit tightening is now the biggest single reason brokers give for making the move. The bank side is shrinking, too. Mark Hewitt, general manager of industry and partnership development at Perth-based Australian Finance Group (AFG), points to three shifts: HSBC’s exit from Australian retail banking, Suncorp’s ongoing migration into ANZ’s systems and Bank Australia’s proposed merger with P&N Group.

 

That’s the push. The pull is just as real. Hewitt says serviceability is often the biggest factor drawing brokers in on its own merits. “They (non-banks) have also remained open to complex borrowing structures, including lending to companies and trusts, where policy and assessment can require greater flexibility,” he says. “These strengths mean non-banks are increasingly considered early in the process because they are the right fit, rather than only after a bank has declined the application,” he adds.

 

Brokers back this up with real enthusiasm, not just necessity. “They have more flexibility in terms of credit policy, especially with specialist loans,” one broker said.

 

Bluestone backs that sentiment with results, taking gold for credit policy this year, with MA Money silver and Thinktank bronze.

 

 

 

The reason brokers give for choosing a non-bank has done a complete about-turn. Banks tightening their credit policy has rocketed to the top spot in 2026 at 31.12%, nearly doubling from 16.34% in 2025, when it sat third behind documentation flexibility and a wider view on credit scores.

 

Both former front-runners fell this year: documentation flexibility to 21.73% from 25.59%, and a wider view on credit scores tumbling hardest of all, down to 16.94% from 24.59%. Because brokers could pick only one reason, part of that fall is simply the flip side of bank tightening’s rise.

 

This isn’t a steady trend – it’s a whipsaw. The same reason sat at 23.4% in 2024, dropped to 16.34% in 2025, then jumped to 31.12% in 2026, swinging by double digits in both directions across three years. That volatility suggests this particular reason tracks the broader bank lending environment rather than any lasting shift in what brokers value about non-banks. The push comes and goes. The pull – flexibility on documentation, credit and complex structures – keeps showing up.

 

Brokers’ own reasons paint an even richer picture. Self-managed super fund (SMSF) lending, alt doc pathways, non-conforming clients, company and trust borrowers, and increased borrowing capacity all came up repeatedly. “Banks’ policy has tightened up and isn’t diverse or flexible, and many of our clients don’t fit the standard bank requirements,” one broker said.

 

The MFAA’s Pannek frames the underlying appeal more broadly than any single reason on the list. “A non-bank’s appeal could be a competitive product, a particular credit policy or expertise that suits the client’s circumstances,” she says, adding that this can be especially valuable for self-employed Australians, investors and borrowers with more complex income sources.

 

Other brokers described the same appeal at length. “The non-bank lenders have continued to provide strong competition to the major banks over the past year by offering competitive interest rates, more flexible lending policies and, in many cases, faster turnaround times,” one said. “They have also been prepared to consider borrowers and lending scenarios that may not fit the tighter credit appetite of the major banks.”

 

 

 

Broker predictions and broker reality keep missing each other two years running, though the gap between them is narrowing. Heading into 2026, brokers forecast the under-20% usage band would shrink to 35.91%. It landed at 44.75%, an 8.84-point overshoot. The year before, brokers forecast 36.09% for 2025’s under-20% band, but the real figure came in at 49.25%, a 13.16-point miss.

 

The direction of the error hasn’t changed – brokers still expect a bigger swing towards non-banks than actually happens – but the size of that error has shrunk by a third in a single year. That’s not a knock on the sector. If anything, it shows both how strongly broker sentiment already favours non-banks and that brokers are getting a clearer read on the pace of that shift each year. One caveat: each forecast comes from that year’s respondents and each result from the next year’s, so the miss reflects broker sentiment as a whole, not the same brokers getting it wrong.

 

But it does mean the new 2027 forecast, more optimistic than last year’s, deserves scrutiny. It predicts the under-20% band will shrink again to 31.31%, and the 21–40% band, already the largest band above 20% at 32.04%, will climb further to 35.36%.

 

The FBAA’s Gagic reads that optimism as well founded, not wishful. “As borrower awareness and broker confidence continue to grow, we expect non-banks to increase their share of the market, particularly in more specialist and underserved segments,” he says.

 

 

 

Client demand for non-banks is near a record high. Price still caps how much of that becomes business, so the lenders winning are the ones converting openness into settlements despite it, not the ones racing to discount.