Lenders, aggregators double down despite Advantedge closure
When NAB announced plans to close Advantedge earlier this month, the first question that sprang to mind was: Is this a sign of things to come?
Advantedge, a no-frills home loan product, is repackaged and sold through major mortgage broker networks.
These include some of the most popular white label mortgages on the market, such as Mortgage Choice SmartSelect Home Loans, AFG Home Loans Edge, Loan Market’s Go Edge and Yellow Brick Road Home Loans Select.
NAB’s decision to gradually close the department over the next 12-18 months was not necessarily a big surprise; major banks like NAB and Commonwealth Bank have lucrative proprietary channels where they can sell mortgage products directly to customers at a higher margin.
Indeed, NAB chief executive Andrew Irvine has made "improving proprietary lending" one of the bank’s three key priorities (alongside "continuing to drive performance in deposits" and "growing business banking"). To facilitate this, NAB has increased its investment in the proprietary channel, with 150 new proprietary home lenders onboarded in the first half of the 2025 financial year.
But the decision to close Advantedge elicited some chin stroking given NAB’s broker-centric corporate messaging and self-professed position as "the bank behind the broker".
NAB does, in all fairness, walk the walk in this regard – the bank has been applauded for its efforts in reducing channel conflict by preventing branches from poaching brokers’ clients.
Brokers also rate NAB highly, voting it the number-one bank for first-home buyers in MPA’s Brokers of Banks 2025 survey.
But closing Advantedge raises questions about what happens when customers are rolled off Advantedge and onto NAB.
Questions over clawbacks, costs and fees
“Some things remain unknown such as which clawback rules will apply,” said Justine McDonald (pictured below), franchise owner and finance specialist at Nectar Mortgages. “One would hope that the clawback period won’t be ‘reset’ as part of the transition – that would be inappropriate,” she added.
A broker FAQ on the closure of Advantedge states: “There is no impact to your commission payments or clawback arrangements because of this announcement.”
MPA reached out to NAB for further clarification on the matter and received this response from Adam Brown, executive, broker distribution: “NAB is working through the migration of Advantedge customers to the NAB platform and remains committed to supporting aggregators, brokers and customers throughout this 12-month process. We understand there are questions around broker arrangements, and we’ll provide clear guidance well before any customer is migrated.”
McDonald, who has a number of clients on Advantedge-funded home loans, was not surprised at NAB’s decision to close Advantedge, given that “in a low-margin environment making white label programmes profitable is difficult”.
There are upsides to the transition, McDonald noted, including better systems, technologies and access to a branch network for borrowers. But she questioned whether NAB will try to implement fees once the “honeymoon period” is over.
Of course, not all customers will stay with NAB, since they could just as easily switch a more suitable lender. As McDonald said: “If at the time of transition, we as brokers feel there is a better option, then we have the ability and the duty under BID (Best Interests Duty) to present it.”
But when it comes time to cross that bridge, will there be fewer white label products on the market to choose from?
Big players double down
No other Big Four bank apart from NAB currently funds white label mortgages. In fact, few traditional banks still operate in the space altogether, barring Bendigo & Adelaide Bank. Banks that previously funded white labels, including ING and Macquarie, have since bowed out.
It is non-bank lenders, including Pepper Money, Thinktank, MA Money and Athena Home Loans, that are far more active in the space.
These challengers have vastly different operational structures than the traditional banks. Without large retail networks, they almost solely rely on brokers to do business. This eliminates the spectre of channel conflict that hovers over the banking majors.
Pepper Money, for its part, has no intention of having a white label rethink.
“The market remains competitive, and there are still funders – like us at Pepper Money – who are deeply invested in the white label space,” Pepper Money’s head of white label and strategic partnerships Mathew Rehayem (pictured left, top of page) told MPA.
Pepper Money, which has been invested in white label loans for over 15 years, is arguably the biggest non-bank lender in the white label space.
“Our experience is a reflection of deep-rooted relationships, broker education, purpose-built systems and a diverse product suite – all while delivering fast and consistent credit decisioning,” said Rehayem.
“Our operational backbone ensures that our white label partners can significantly improve conversion and scale confidently, knowing they’re backed by infrastructure designed for speed and flexibility.
“We’ve built trust with our aggregator partners and remain committed to supporting brokers and their customers. Our focus is on delivering choice, scale, innovation, and consistency.”
MPA has also reached out to other prominent white label funders, including Athena Home Loans, Thinktank and Bendigo & Adelaide Bank, for input.
Two of the largest proprietors of white label mortgages have expressed their commitment to keeping these products on panel.
“It is not our place to comment on other businesses but at this stage we see no indications that other funders are planning to exit,” said Hayden Cush (pictured right, top of page), general manager – white label at AFG. “We also remain confident in the value a white label partnership can provide to lenders looking for greater distribution, deeper insights, focused personnel and aligned branding.”
AFG’s white label products are funded through AFG’s own securitisation program, as well as funders including Thinktank, Pepper, Bendigo and Adelaide Bank, and Brighten Home Loans.
“We remain confident about the robust lending program we have at AFG Home Loans and the strong alternatives it offers new customers,” said Cush.
Connective, another prominent mortgage aggregator with a notable white label offering, also expressed its dedication to white label.
“White label remains a strong and growing area of our business, and it continues to be a key focus,” a Connective spokesperson told MPA.
Connective’s white label Connective Home Loan portfolio has $14 billion in loans under management across 35,000 borrowers, supported by seven funding partners. The aggregator believes lenders achieve stronger results when the Connective Home Loans brand is on the product, “thanks to the trust we've built with brokers over the past 10 years”.
“It's ultimately a commercial decision for funders to stay or move on,” the spokesperson added.
Conflict of interest?
The fact that major aggregators like AFG sell own-branded home loans is not without its controversies.
Earlier this year, AFG removed three prominent non-bank lenders – Bluestone Home Loans, Better Mortgage Management and MA Money – from its lender panel.
While AFG is well within its right to do so, the decision turned more than a few heads. Some voices in the industry who spoke privately with MPA cited concerns that AFG was intentionally restricting choice as a means of channeling more customers towards AFG’s higher-margin white label products.
This is not a new concern. As far back as 2018, the Productivity Commission warned of anti-competitive practices in the white label space. However, this was in the context of lender-owned aggregators, encompassing neither AFG nor Connective.
AFG’s general manager industry and partnership development Mark Hewitt robustly denied that there is a conflict of interest in AFG having its own white label loan offering.
“I don’t think there can be (a conflict), because the aggregator and the manufacturer are not involved in the choice of product with the end client,” Hewitt told MPA.
“In making that decision to remove the lenders from the panel, we looked very closely at the duplication of products that existed, and a lot of lenders were offering very similar products and services,” said Hewitt, adding that with around 90 lenders on panel, “there’s an extensive amount of choice”.
Nonetheless, some AFG brokers have expressed disappointment in private with MPA that Bluestone, BMM and MA Money products are no longer available to them.
Bluestone’s chief commercial officer Tony MacRae was also disappointed.
“Over the past 18 months, our team put in the work to build strong relationships with AFG brokers, and the results spoke for themselves, with volumes quadrupling in that time. So to be removed by a partner we’ve supported over many years was, understandably, both surprising and disappointing,” he told MPA.
MacRae continued: “AFG cited cost as the reason, though no specifics were provided. It’s possible our strong growth may have impacted their white label volumes, which tend to deliver higher margins to the aggregator. Either way, we weren’t given further detail.”
MacRae believes white label loans “absolutely” serve an important function in the mortgage finance industry. He said: “The key is a genuine partnership: when both sides are invested and backing the product, it can be an effective distribution channel. We believe there’s room for both Bluestone's core brand and white label solutions to coexist and complement each other.”
