Connective Home Loans settlements soar, but conversion rates take a hit amid tightening credit conditions
Mortgage aggregator Connective is doubling down on its white-label home loan offering after penning an 18% increase in settlements in its Connective Home Loans segment in the first half of its 2025 financial year.
A total of $2.6 billion was written through Connective Home Loans in the six months to 30 June, with June marking the best month for settlements at $798 million.
However, conversion rates were less than stellar at just 62% of the $4.2 billion in applications lodged. This is down from 73% achieved in the previous year.
Michael Goerner, head of Connective White Label, attributed the drop in conversion rates to “how actively borrowers are shopping around”.
“(Borrowers) are testing the market more before deciding where to settle, which is a sign of both heightened competition and increased borrower confidence,” he said.
In further comments supplied to MPA, Goerner explained how conversion rates are far from an exact science, often skewed by superfluous lodgements due to “a lack of knowledge or training of the broker”.
Furthermore, by Goerner’s estimations, around one in four applications is double counted due to brokers sending the application to multiple lenders.
This can create frustration for aggregators like Connective, as it clogs up resources and burdens credit teams with unnecessary paperwork.
While Connective is limited in its ability to reduce inadequate applications, Goerner emphasised that educating brokers about the specific features and purposes of each product “is key… not only for (Connective Home Loans) but for every lender.
“From a business perspective, processing a whole lot of applications for no result is not a really good return on investment,” Goerner explained. “For us, along with every other and even the industry, the key is better education of brokers of knowing what’s a deal and what’s not a deal for a customer.”
Placing a deal on first touch, Goerner reminded, is not just a great experience for the broker, “but a fantastic experience for the customer”.
Less-than-stellar conversion rates aside, Connective expects white-label volumes to keep rising throughout the second half of 2025, thanks to active broker engagements.
“These results show how effectively brokers are stepping in to help borrowers find the right solutions,” said Goerner. “Even in a more complex environment, they are identifying opportunities and ensuring their clients can access lending options that work. In the current lending landscape, speed, certainty and choice matter more than ever.”
According to Connective, half of all brokers in its network engaged with Connective Home Loans in the period, with the launch of Connective Bridge, Connective Reverse and Connective Horizon bolstering demand.
With eight funders, Connective Home Loans can service at least 95% of all deals, Goerner noted. “Our figures have really improved because we’re not just concentrated on prime lending.”
For now, Connective is not plotting more white-label products, the strategy is to keep chipping away at the other 5%.
As Goerner said: “Any way… we can reduce that gap of stuff we can’t do, we will look at that.
“Brokers are looking for flexible tools that allow them to meet a wider range of client needs, whether that is bridging finance, reverse lending, refinancing or more structured lending. We are making CHL a more relevant and competitive choice across different borrower situations by broadening our product set and filling the gaps.”
Connective Home Loans’ results follow the aggregator’s wider first-half results on Monday, which underscored a 24.5% year-on-year increase in residential settlements to $49.8 billion.
On the commercial side, Connective brokers settled $8.61 billion in the period, representing a solid 36.7% year-on-year uptick.
