The new backdrop calls for adaptation strategies among mortgage lenders – and many nonbanks have acknowledged the challenges of originating new mortgage loans. MA Money does so, too – but it also says there are opportunities for growth.

Gour comments: “Higher interest rates and lower borrowing capacity have not stopped buyers from entering the housing market, demonstrating that there are still opportunities for stock to be placed.”

In fact, MA Money has experienced growth in its asset book driven by borrowers refinancing their home loans over the past six months – this type of lending has averaged approximately 60 per cent of new originations. Meanwhile, the expiration of fixed rate-mortgages written in the pandemic period will reach its peak throughout 2023 and 2024, and MA Money believes this presents another opportunity for lending growth.

MA Money has a diversified portfolio of higher- and lower-risk lending. The product offering covers the full spectrum of prime, near prime and specialist – each of which have competitive, risk-based pricing.

“This cascading product range provides borrowers with a higher probability of approval as well as an opportunity to be assessed under the appropriate individual risk profile to match their circumstances,” Gour says.

Specialised lending solutions mean MA Money believes it is well positioned to adapt to the higher rates environment. Gour comments: “MA Money has positioned itself well by offering unique lending solutions as an alternative to traditional banks. This resulted in our loan book actually increasing by 85 per cent in FY23.”

To manage this portfolio growth, Gour continues, MA Money has established a diverse funding programme through multiple warehouses and with strong relationships across a range of domestic and international investors. In the new economic climate, MA Money finds investors also prefer diversity in their loan books, and are seeking to spread risk across geographies, loan sizes and loan-to-value ratios by introducing portfolio parameters in their facilities.

With a larger asset portfolio – and therefore increased funding requirements – now a reality, MA Money is eyeing a public securitisation market debut in due course. Public issuance has always been a fundamental target for the lender and Gour confirms it will be a main plank of its funding strategy in future.

Gour says MA Money is closely following the market with the goal of issuing in an optimal window. This could be as soon as late 2023 or early next year. A public securitisation transaction will provide MA Money the opportunity to diversify its funding further and establish a capital market presence.

“Although we are yet to complete a public securitisation transaction, we have been taking proactive steps by engaging with investors and discussing the business strategy and potential investment opportunities,” Gour reveals. “We understand investors value issuer and product diversity, and we will continue to dedicate our time to building this investor base.”

MA Money also believes it has a strategic advantage from strong distribution partnerships, advanced technology, financial backing from its ultimate parent – MA Financial – and robust funding capacity.

“We have a strategic funding plan in place for the year ahead, with a diverse range of senior funders and MA Financial asset management for mezzanine funding across various warehouses,” adds Gour. “These warehouses have sufficient capacity to fund the volume of loans we forecast to originate in the year ahead.”