The Australian mortgage industry value chain, which is divided into three broad categories:

  1. Origination
    The process by which a borrower submits an application to enter into a loan with a Lender; typically through a mortgage broker or directly at a bank or building society
  2. Servicing
    The ongoing provision of services to the borrower and management of the mortgage for the term of the loan. This is generally carried out by the lender or provider of the mortgage product.
  3. Funding
    Bank lenders have traditionally funded their assets using a combination of retail deposits, wholesale funding (lending by one financial institution to another) and through a process known as “Securitisation” (hover definition: -.  Non-bank lenders are not authorised to take deposits and are therefore reliant on either wholesale funding or Securitisation to fund their loans.

 

Industry Structure and Trends