Key Takeaways
- Unconditional Finance founder Chris Raymond was featured in Mortgage Professional Australia’s (MPA) 25th-anniversary edition, in a retrospective on how non-bank lending has changed over 25 years.
- Non-bank lenders have shifted from a last-resort option to a mainstream choice, driven by technology investment, competitive prime pricing and policies the major banks don’t offer.
- For self-employed borrowers, investors and clients with complex income, a non-bank is often the right fit from the outset.
- More competition means more choice. A broker who compares banks and non-banks can match you to the lender that fits your situation.
Non-bank lenders are now a mainstream part of the Australian mortgage market, not a last resort. For borrowers who don’t fit a major bank’s template, that shift has widened the paths that end in an approval.
The change is clearest for people the banks find hard to assess. A non-bank will often weigh business income, non-standard pay or a complex structure on its merits, which is why a self-employed home loan broker can now source a non-bank loan at a competitive rate instead of a penalty one.
Unconditional Finance founder Chris Raymond covered this shift in Mortgage Professional Australia’s (MPA) 25th-anniversary edition. Having built his career as this shift played out, he has seen it change what he recommends to clients.
Chris Raymond Featured in MPA’s 25th-Anniversary Edition
Chris Raymond, named 2025 Residential Broker of the Year at the Australian Mortgage Awards, was one of a small group of brokers MPA invited to reflect on 25 years of change in its anniversary edition. The retrospective tracks non-bank lenders moving from the fringe of the market to a trusted part of a broker’s toolkit. The feature appears in MPA’s digital magazine.
Why Non-Bank Lenders Moved From Last Resort to First Choice
Non-bank lenders moved into the mainstream because they invested in technology, brought competitive prime pricing and niched into policies the major banks don’t cover. A generation ago, brokers typically used them only for clients with defaults, tax debt or income the banks wouldn’t assess.
In the MPA feature, Chris described the shift.
We have seen the non-bank space mature as they invest in tech, bring competitive prime options to the table and niche down on policies that the major banks can’t compete with.
Today, a non-bank is often the first option worth considering for investors, complex income earners and the self-employed, not the fallback.
What Changed Across 25 Years
Two turning points moved non-bank lending into the mainstream. The first was the global financial crisis. The non-bank brands that kept operating through it, and kept backing brokers, earned lasting trust. The second came when lending rules tightened around investment and interest-only loans; the major banks pulled back, and brokers who had never used a non-bank needed one. Many stayed.
The feature reports that Pepper Money’s broker utilisation, the number of brokers writing at least one loan with it in a 12-month period, grew by up to 300%. More broadly, the major banks’ share of broker-originated lending fell below 40%, to 39.9%, in the July to September 2024 quarter, according to the Mortgage and Finance Association of Australia (MFAA), with more broker business going to lenders outside the big four. These figures cover the periods stated and may have shifted since.
What Non-Bank Lending Means for Your Situation
The shift matters most when your circumstances sit outside a standard application:
Self-Employed and Complex Income Borrowers
Non-bank lenders assess business income, add-backs and non-standard pay in ways some major banks won’t, which can turn a decline into an approval. That flexibility is often the deciding factor for borrowers whose income doesn’t arrive as a regular salary, even after recent bank policy changes at the majors.
Property Investors
Non-bank lenders have brought sharper pricing and policies built for portfolio growth, which can help once serviceability tightens across several securities. That makes them worth raising with an investment loan broker.
SMSF and Trust Borrowers
Lending inside a self-managed super fund (SMSF) or through a trust typically sits with a smaller group of lenders, and non-banks have built real capability here. Knowing which lender accepts your structure often matters more than the advertised rate, whether the loan runs through an SMSF loan broker or a trust loan broker.
Impaired Credit Borrowers
Non-bank lenders began by serving borrowers with impaired or non-standard credit, and many still offer a route to home ownership or refinancing where the major banks decline.
Where Non-Bank Lending Is Heading
Chris expects the distinction between banks and non-banks to keep fading until it barely registers.
If I were interviewed in 20 years’ time, as a veteran, I suspect the view of non-bank lenders being an alternative lender will seem as outdated as dial-up internet. They will simply be another established and trusted partner of the lending landscape, in line with the current first-tier lenders.
For borrowers, a market where more lenders compete on equal footing can mean better pricing and more room to structure a loan around real goals.
Confidence Your Loan Fits Your Situation
You are not limited to the major banks. With non-banks now competing on price and policy, the real question is which lender, bank or non-bank, suits your income, your structure and your goals. A broker who works across the whole panel can put that comparison in front of you before you commit, so the loan is chosen around your situation, not the branch nearest you.
If you’re weighing whether a non-bank suits your next loan, the team at Unconditional Finance can talk through the options that fit your circumstances.
Frequently Asked Questions (FAQs)
1. Are non-bank lenders safe to use?
Yes. Non-bank lenders that offer consumer home loans must hold an Australian Credit Licence and are regulated by the Australian Securities and Investments Commission (ASIC) under the National Consumer Credit Protection Act 2009. They are a mainstream part of the market.
2. What is the difference between a bank and a non-bank lender?
A bank is an authorised deposit-taking institution that funds loans partly from customer deposits. A non-bank lender does not take deposits and funds its lending from wholesale markets, while still holding a credit licence and following the same consumer credit rules.
3. Do non-bank lenders charge higher rates?
Not always. Many now offer competitive prime rates, and the rate that applies usually depends on your income type, loan-to-value ratio and loan structure.
4. Is Pepper Money a bank?
No. Pepper Money is a non-bank lender, and one of the brands featured in MPA’s 25th-anniversary edition. It is one of many lenders a broker may compare.
5. Why would a broker recommend a non-bank over a major bank?
Because it may be the better fit. Non-banks often have sharper policy for self-employed income, trusts and SMSF lending, and their prime pricing is now competitive with the banks.
This article is general information only. It does not take your objectives, financial situation or needs into account, and it is not credit, tax or financial advice. Product terms and eligibility criteria change, so confirm current details with the provider and consider speaking with a qualified mortgage broker, accountant or financial adviser before acting on it.