Changing Home Loans for Good
At Credit Star, we’re committed to transforming home loans for the better. Known as Australia’s first loyalty-tax-free lender, our mission is clear: make home loans fair and accessible. Today, we’ve launched a whitepaper proposing changes to the funding of Australian credit markets, aiming to increase competition, fairness, resilience, and efficiency, while securing long-term economic growth.
Australia’s Outlier Financial System
Australia’s financial system is unusually bank-dominated, with ~95% of housing credit originating from banks, compared to less than 50% in the U.S. This setup limits direct investment into credit markets, impacting competition, fair access to credit, and economic stability.
The Case for Change
- Boosting Competition: A concentrated banking system adds billions to annual mortgage costs due to restricted alternatives. Sustainable competition requires regulatory support beyond blocking mergers.
- Ensuring Fairness: Australia’s unique mortgage system places rate hike burdens on borrowers, causing financial strain for homeowners.
- Building Resilience: Superannuation investments largely fund overseas projects instead of local credit markets, which weakens Australia’s financial independence.
- Future-proofing Australia: Australia’s superannuation system has untapped potential to fund essential long-term projects, from renewable energy to aging population needs.
Path Forward: A Blueprint for Diversified Credit Funding
Our whitepaper recommends an Australian public securitization program inspired by Canada’s model. Such a program would use superannuation resources to fund housing and economic infrastructure, enhancing market fairness, resilience, and efficiency.
