Business Daily Media

Non-bank lenders can fill the void for borrowers amid rising interest rates


Just shy of a year on from launch, and with over $500m in applications processed, non-bank lender Bridgit is expecting mortgaged homeowners to look away from the big banks to help ease the pain of rate rises.

Bridgit, which launched its inaugural brand campaign recently, allows Australian homeowners to secure their next home before they have sold, using its proprietary technology to provide real time credit solutions. Bridgit is filling a significant gap in the lending market at a time when banks are increasingly less able to come to the table and offer short term bridging loan services to both new and existing customers.

In light of the Reserve Bank of Australia raising the cash rate target by 35 basis points to 0.35%, Bridgit founder and CEO Aaron Bassin says it’s time for homeowners to start considering their options. Aaron believes that there will be both short and long term impacts on homeowners and borrowers, and increased competition in the lending space which will only fuel the rise of non-bank lenders.

“The extent of the impact of this rate rise for any given non-bank lender will generally depend on agreements regarding their facility. These agreements will then determine the direct impact the rate rise may have on their business, as well as what they end up passing on to their customers.

“We are already starting to see some of the non-bank lenders in the market increase their rates, and it’s natural to expect that others will follow their lead in the market. What I do expect to see is an increase in customers 'shopping around' for the best rate. Within this, lenders with 'no fee' structures in place are likely to see an increase in engagement as borrowers look to save where they can, particularly with non-bank lenders outside the big banks.”

Despite widely held expectations that interest rates could hit close to 3% by the end of 2022, Bassin says we shouldn’t panic, but rather that it’s time to start shopping around because rate rises will inevitably drive competition among lenders vying for their business.

“I don’t believe the immediate impact of this rate rise will be detrimental to homeowners. What we will expect in the short term is an increase in queries from borrowers about their position and how they can best navigate a new world of rising rates. What is more worrying is the long term impact of multiple interest rate rises, that could seriously affect homeowner confidence and slow down growth in the housing market significantly,” Bassin adds.

“We’d expect to see homeowners consider moving into a fixed term rate over variable, which offers more peace of mind to some borrowers concerned about the longer term impacts. As we saw at the beginning of the pandemic, we expect to see consumers considering refinance and exploring new solutions including non-bank lenders.

“In Bridgit's case we won't be responding with an increase in rates, our pricing will be remaining the same. But this is undoubtedly going to be an interesting and competitive period, as we haven't been in a situation like this for a long time.”


About Bridgit

Bridgit is a non-bank lender specialising in bridging loans, offering same day pre-approval to consumers thanks to its proprietary technology. Co-founded by finance expert Aaron Bassin and mortgage broker Nick Jacobs, Bridgit is on a mission to bring borrowers new solutions for faster and fairer financing.

Business Today

Why growing small businesses are rejecting traditional loans to stay afloat

Australian small businesses look for alternatives to fund growth A record number of Australian small businesses are ditching traditional bank loans to fund growth and generate cash flow. “Around 75% of businesses who come ...

The most common mistakes active travellers make that put their lives in danger

PIONEERING scale-up Advanced Mobility Analytics Group (AMAG) is calling for the phasing out of historic methods that rely on crash data for managing pedestrian risk on our roads with more powerful, proactive methods enabled by...

3 in 4 fundraisers have experienced sexual harassment on the job – often because of inappropriate behavior from donors

Sexual harassment is a common workplace hazard for nonprofit fundraisers.fizkes/iStock/Getty Images PlusWhile the #MeToo movement that raised public awareness of sexual harassment is making fewer headlines than it did in 2017 and ...

Cathay Pacific 2021 Sustainability Report

New commitments in carbon neutrality and diversity, and supporting the Hong Kong community during the pandemicThe Cathay Pacific Group has released its annual Sustainable Development Report that addresses its commitment and prog...

Cozycozy, is tackling consumer manipulation in the travel industry

With its user-centric algorithm, Cozycozy fights against the Online Travel Agencies' rampant manipulation of consumers’ choices. In 2019, 112.3 million domestic trips and 11.3 Million international trips were taken by Austral...

Foreign companies exiting Russia echo the pressure campaign against South Africa's racist apartheid system

McDonald's is leaving Russia after three decades of operating there.Sefa Karacan/Anadolu Agency via Getty ImagesMcDonald’s provided many Russians with their first taste of capitalism three decades ago. Now, the global fast-f...

Business Daily Media Business Development

Why growing small businesses are rejecting traditional loans to stay afloat

Australian small businesses look for alternatives to fund growth A record number of Australian small businesses are ditching traditional bank loans to fund growth and generate cash flow...

Optipay CEO Angus Sedgwick - avatar Optipay CEO Angus Sedgwick

The most common mistakes active travellers make that put their lives in danger

PIONEERING scale-up Advanced Mobility Analytics Group (AMAG) is calling for the phasing out of historic methods that rely on crash data for managing pedestrian risk on our roads with mor...

Simon Washington, AMAG CEO - avatar Simon Washington, AMAG CEO

Rishi Sunak's £15 billion cost-of-living package and windfall tax: four experts respond

Rishi Sunak, the UK chancellor of the exchequer, has unveiled a £15 billion package of measures to help households with the cost of living, after energy watchdog Ofgem announced it wou...

Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open University - avatar Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open University

the economic tactics that drive Liverpool and Real Madrid

Liverpool against Real Madrid in the Champions League final is a fixture for football fans to savour – two giants battling it out for one of the most prized trophies in the game. And r...

Simon Chadwick, Global Professor of Sport | Director of Eurasian Sport, EM Lyon - avatar Simon Chadwick, Global Professor of Sport | Director of Eurasian Sport, EM Lyon

Cathay Pacific 2021 Sustainability Report

New commitments in carbon neutrality and diversity, and supporting the Hong Kong community during the pandemicThe Cathay Pacific Group has released its annual Sustainable Development Repor...

Business Daily Media - avatar Business Daily Media

Cozycozy, is tackling consumer manipulation in the travel industry

With its user-centric algorithm, Cozycozy fights against the Online Travel Agencies' rampant manipulation of consumers’ choices. In 2019, 112.3 million domestic trips and 11.3 Million i...

Business Daily Media - avatar Business Daily Media



NewsServices.com

Content & Technology Connecting Global Audiences

More Information - Less Opinion