ColCap’s $2.7bn RMBS issue proves Australia’s garnered huge international interest, reveals CEO
If one needed any further evidence of Australia’s leading position as a mortgage market hotspot, one can take a look at the flurry of residential mortgage-backed security (RMBS) issuances in the opening months of 2026.
Both AFG and MA Money announced their largest RMBS to date in recent weeks, at $1.2 billion and $1.25 billion respectively, although these were eclipsed by ColCap’s record-breaking $2.7 billion issue, announced on Friday, 20 February.
Upside from $1 billion, it marks the largest-ever RMBS issued by a non-bank lender in Australia, knocking Firstmac’s $2.5 billion issue off its perch after just three months.
It’s reflective of the impressive rate of growth that ColCap is enjoying.
It originated $6.9 billion last year, tracking at 18% year-on-year growth, which is quite easily above broader system growth and substantially outpacing the traditional lenders.
For context, Westpac increased its mortgage portfolio by 3.8% in its latest quarter, while ANZ increased its balances by 3.9% in its latest quarter.
No signs of slowing
Despite the prospect of house prices cooling off in 2026 amid higher interest rates, “the pipeline is not reflecting that yet”, ColCap chief executive Andrew Chepul (pictured) told MPA. The refinancing market is particularly buoyant, which is feeding into prepayment rates. As such, both prime and near-prime demand continues to surge.
International interest in the Australian housing market, meanwhile, continues to soar.
Chepul revealed that 42% of the investment into ColCap’s $2.7 billion issue came from international investors. “There's a lot of offshore money, (they’re) looking at Australia as a destination for investing,” he said.
“There is a flight to quality. Australia is considered a safe haven and the bond market generally across all asset classes is actually performing exceptionally well.”
Despite inflationary pressures, international investors remained enticed by Australia’s low unemployment and what Chepul sees as “reasonable” growth.
It helps that ColCap has a strong track record in the bond market and is particularly active in the prime mortgages market. “We're a regular entrant in the market and because of our size of business, they're quite attracted to the name,” said Chepul. Although even he was surprised at the size of the upsize.
“Within two days, the demand was well over $2 billion. We actually looked at it and said, you know, this is a real opportunity for us to start the year in a strong way. It's also the fact that our volumes are significantly higher than where they were 12 months ago.”
Alongside owner-occupier and investor lending, the group has seen substantial interest in SMSF lending products, although Chepul anticipates margin compression happening on the product as more entrants enter the space (hello, AMP Bank).
ColCap's diverse distribution model
ColCap, which is preparing to celebrate its 20th year in business, currently has around $20 billion in assets under management, putting it on par with the largest non-bank lenders in the country.
That may surprise some people, given ColCap’s brand recognition is not on par with, say Pepper Money or Firstmac. That could come down to ColCap’s multi-channel distribution model.
Alongside ColCap’s broker-focused brand Granite Home Loans, it has a cohort of mortgage managers under the Origin Mortgage Management Services banner who contribute roughly 50% of ColCap’s origination volume. These are self-licensed mortgage managers who deal directly with brokers, rather than through aggregators.
ColCap also funds mortgage aggregator LMG’s white-label ‘Zeus by LMG’ home loan product. Despite only being active for three months, Zeus by LMG contributes close to 10% of ColCap’s originations. ColCap also has its direct-to-customer Homestar brand.
But ColCap could be preparing to rev up its marketing machine as its 20th anniversary approaches.
“You'll probably see Colcap more in your face over the next 12 to 18 months,” said Chepul. Watch this space, as they say.
