MyState Bank takes on the ‘Big Four’ with home loan lending

The giants of Australia’s home loan industry are facing fresh competition from an unlikely source, with Tasmania’s MyState Bank emerging as one of the fastest growing home lenders in the country.

MyState Bank - a leading and trusted brand in its home market in Tasmania - is now making advances on the mainland.

The mainland expansion will consolidate and build upon MyState Bank’s successful transition to a largely broker-focused home lending model, which has seen phenomenal growth in business for the bank and its broking partners into and beyond the first quarter of 2021-2022.

In the four months to 31 October 2021, MyState Bank’s home-loan applications were up 137% on the previous corresponding period for 2020, while home-loan settlements were up nearly 100%. The figures confirm MyState Bank’s status as one of Australia’s fastest growing home lenders.

MyState’s General Manager of Banking, Huw Bough said the extraordinary recent growth in the bank’s home loan portfolio demonstrated the value of a more human approach to banking, both for its customers and broking partners.

With its long history as a customer-focused brand in Tasmania, and a modern suite of online home loan products, MyState Bank offers a highly attractive and competitive alternative for mortgage brokers serving new and existing customers across Australia.

“I think the key is trust,” Mr Bough said.

“Customers trust brokers that provide the right advice, and brokers trust lenders that deliver the right products, with the right features and technology platform, which meets their service commitments.”

Mr Bough said more mortgage brokers were choosing to partner with smaller ‘challengers’ like MyState Bank because, increasingly, they offered better service and features to brokers and customers than the major banks.

“Quite often challengers have got better technology, more consistent service, a more human touch, and they do what they say they will.” Mr Bough said the greater reliance of smaller banks such as MyState on broking channels for mortgage distribution had shifted the competitive balance in this fast-growing segment of the market.

“We’ve been in a position to invest in the broking channel because we rely on it for distribution,” he said.

“We can say to brokers, we’re supporting you because our interests are aligned with yours.”

Among the keys to MyState Bank’s growth have been its national network of broker relationship managers. While its initial focus for mainland expansion is in Victoria, New South Wales and Queensland, more relationship managers will be recruited across the eastern seaboard as the business growth continues.

The transition to broker-focused lending is strongly supported by recent consumer research commissioned by MyState Bank*, which indicates Australians increasingly view mortgage brokers as primary valued partners in securing finance for their homes.

The research also highlighted how, before and during recent COVID-related lockdowns, Australians have become increasingly comfortable with a ‘virtual loan’ process – and more open to alternative sources of competitive home financing beyond the ‘Big Four’ banks.

MyState Bank surveyed more than 500 Australians who had used a mortgage broker in the past three years. Of those who responded:

• 86% said they were either very satisfied or satisfied with the experience.
• 91% said they would recommend the services of the broker to their family and friends.

The survey results reinforced the trust and belief of MyState Bank in the primary role that mortgage brokers will play in the long-term future of its expanding home loan business.

While Tasmania will continue to be the mainstay of its business, MyState Bank believes its mainland expansion via its mortgage broking partners will add value for all stakeholders, with a strong new competitor in the marketplace providing an attractive and substantial point of difference to the major banks.

* Notes on research: Nationally representative survey conducted by PureProfile of 517 Australians during September 2021.
Loan applications are subject to MyState's credit approval criteria.