Better Mortgage Management at 27: still rolling with the punches

Better Mortgage Management's 27th birthday came at a time with little to celebrate in mortgage finance.

Soaring interest rates and a maligned Federal budget have cooled deal volumes off considerably, while the ban on SMSF borrowing for residential property shut off one of the Brisbane-based mortgage manager's core product lines.

But founder Murray Cowan (pictured) isn't worried – he's been here before.

Since opening Better Mortgage Management (BMM) in 1999, Cowan has steered it through the Global Financial Crisis (GFC), COVID-19 and years of shrinking margins. Asked by MPA whether today's headwinds are the toughest yet, he didn't hesitate.

"No, I'd say the GFC was more substantial," Cowan said. The current shake-up, he said, is "different, not as difficult".

A mortgage manager originates and services home loans for brokers' clients, funding them through wholesale funders and securitisation programs rather than its own balance sheet. When BMM opened in November 1999, that model gave it a clear edge over the banks.

"In our early years, we could undercut the banks on rate and pay brokers very high commissions," Cowan said.

Then the GFC hit like a wrecking ball. Funding and margins for the sector shrank, while the banks learned to live on thinner margins. Cowan said BMM, like many others in the sector, "realised there were other opportunities and niches to pursue".

GFC's lasting impact

Cowan said the GFC hit non-bank lenders far harder than anything since, because government support flowed mainly to the banks.

"When the GFC hit, our rates immediately became far less competitive than bank rates, and the government supported the banks quite strongly," he said. "They did little to support the non-bank sector."

The damage was lasting. "Our loan book dropped around 30% in two years," Cowan said.

COVID-19 was a gentler test. Cowan said the government supported banks and non-banks "probably equally well", and BMM could still get competitive funding. "We had some reduction, but we could still continue at reasonable levels," he said.

This time, despite rising rates and the tax changes for property investors, Cowan does not expect BMM's book to shrink. Loans written over the past three years were priced competitively as non-banks fought on rate, and SMSF borrowers tend to stay put because switching means supplying a fresh pile of documents.

"I don't see our book dropping – the loans we've written over the last few years are funded at very competitive rates," he said.

Addressing the SMSF lending ban

BMM's recent history is a run of pivots. Alt-doc lending was a strong niche about five years ago, until banks and non-banks crowded in. About four years ago, BMM moved heavily into SMSF lending, which became its main volume driver.

Then the federal government banned new limited recourse borrowing arrangements (LRBAs) – the structure SMSFs use to borrow – for residential property from 10 August 2026. Existing loans, refinances of those loans and commercial property borrowing are unaffected.

Eight of the country's largest non-bank lenders united to criticise the residential SMSF borrowing ban. Preliminary figures from the Australian Finance Industry Association (AFIA) suggest the SMSF lending market is far bigger than Treasury estimated, with members writing more than 16,000 new residential SMSF loans worth $10.3 billion in the 2026 financial year.

BMM saw a rush of residential SMSF purchases as borrowers raced to sign contracts inside the 45-day window. But Cowan said the market still has room: of the four SMSF lending niches – residential purchase, residential refinance, commercial purchase and commercial refinance – only residential purchase has been shut off.

BMM has focused on commercial SMSF lending for the past 12 months, giving it a head start, and is now pushing into three other areas:

• Lease doc commercial loans up to 65% loan-to-value ratio (LVR), at about 7.69%, which Cowan said need less paperwork than bank equivalents

• Residential refinancing, assessed at a 2% servicing buffer against the 3% most banks use, with 40-year terms through some funders

• A construction loan for first home buyers, due in coming months, with interest capitalised during the build

It is also able to fund co-living and NDIS properties.

With 23 staff, BMM can move quickly. "We've adapted, we've moved with the times and we do what we need to do," Cowan said. "Being smaller than our larger competitors, we adapt quickly and getting the team up to speed doesn't take long."

Why now is a good time for mortgage managers

Cowan argued the mortgage manager model suits a tight lending market, particularly as the RBA's rate rises bite. He sees "a bit of an opportunity" in refinancing, "with rates going up and some customers finding it a bit of a struggle".

His case rests on choice. A broker going to a single-brand non-bank gets one credit policy. BMM, regulated by the Australian Securities and Investments Commission (ASIC) rather than the Australian Prudential Regulation Authority (APRA), places loans across seven wholesale funders, each with its own policy, LVR appetite and servicing rules.

"Sometimes we can find a corner in the policy where it fits with one of our funding programs," Cowan said. He pointed to an 80% LVR loan now going through in Port Hedland, a mining town where property values track iron ore and many lenders hold back.

The banks have also stepped back from SMSF borrowers, Cowan said, because APRA requires them to hold extra capital against those loans. APRA's debt-to-income limit, in force since February 2026, likewise applies to banks but not to non-bank lenders.

BMM's funders, Cowan added, are partners rather than suppliers, and will adjust rates and policy where BMM can show volume. "It's not just mortgage managers, it's the funders that stand behind us as well," he said.

After 27 years, Cowan has heard his sector written off before. "Over the years, people have written off our sector, and we always seem to fight back and find a way," he said.