The Homeowner
You, me, or anyone trying to buy a home in Australia's expensive property market.
Needs "Non-Conforming" Loan
- Self-employed
- Impaired credit history
- High LVR (>80%)
- Complex income
Big Four Banks
Provide warehouse funding but don't hold the risk on their books.
Westpac
CBA
NAB
ANZ
✓ Offload Risk & Capital
WAREHOUSE $$$
Non-Bank Lenders
Originate loans to borrowers banks won't touch directly.
Liberty
La Trobe
Pepper Money
Firstmac
↗ Originate & Distribute
Loan Origination, Bundling & Slicing
Individual mortgages are pooled together and divided into risk layers
Securitisation SPV
Special Purpose VehicleSenior Tranches
First in line for repayment, lowest risk
→
Mezzanine Tranches
Higher yield, absorbs losses after equity
→
Equity / Junior Tranches
First loss position, highest yield
→
Australian Super Funds
Your retirement savings, managed by industry and retail funds.
AustralianSuper
Aware
Hostplus
UniSuper
REST
Cbus
Senior Buyers
Super funds buy "safe" AAA layers. Low yield, low risk... supposedly.
Mezzanine Buyers
Private credit funds (owned by super) chase higher yields here.
Equity Buyers
Private credit & credit funds take first-loss positions for maximum yield.
↻
$Billions
in Funding
Flows Back
Flows Back