Ep 398: Why non-bank lenders can significantly extend your investment capacity

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The lending landscape has changed dramatically over the past two decades, and the gap between traditional banks and non-bank lenders has never been wider. In this episode, Stuart breaks down the key differences between authorised deposit-taking institutions (ADIs) regulated by the Australian Prudential Regulation Authority (APRA) and non-bank lenders regulated primarily by the Australian Securities and Investments Commission (ASIC) under the NCCP framework.

You’ll learn how banks fund loans using customer deposits protected by the Financial Claims Scheme, while non-banks typically rely on securitisation and bond markets. Stuart explains why non-banks aren’t subject to APRA’s macroprudential limits, including serviceability buffers and debt-to-income caps, and how this can translate into materially higher borrowing capacity.

He also unpacks the important nuances around offset account structures with non-banks, potential risks in a lender failure scenario, and why funding costs can shift independently of the RBA cash rate.

Most importantly, Stuart explores how using a non-bank lender strategically can accelerate wealth creation, particularly in property investing, where access to finance often matters more than marginal differences in interest rates.

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.