Online mortgage comparison site HashChing has become the latest in a long string of mortgage websites to launch its own-brand – or ‘white label’ – home loan product.

The move is part of a trend that is seeing several major banks expand their reach by offering unbranded home loans through apparently independent third parties.

Of the big names, NAB, Macquarie and Bendigo and Adelaide Bank are the most active ‘white labellers’.

HashChing would not disclose which lender was behind the new home loan, saying the information was “commercially sensitive”.

However the loan is already on the market, and The New Daily was able to obtain a document revealing the underlying lender is Bendigo and Adelaide Bank.

Of particular interest is the fact HashChing loan’s comparison rate – 3.65 per cent – is almost half a percentage point lower than the cheapest loan offered directly from Bendigo Bank, which has a comparison rate of 4.06 per cent.

The HashChing loan also includes an offset account, while the cheapest Bendigo Bank loan does not.

In other words, it looks like you can get a much better deal through this third-party lender than you can directly through Bendigo Bank, even though the underlying lender is the same.

Bendigo Bank declined to comment on the HashChing product.

There is no suggestion that there is anything illegal or untoward about the practice of white labelling home loans. However, given most Australians are probably either unaware that it happens at all, or else don’t realise how widespread it is, HashChing’s entry into the market is an occasion to put the practice under the microscope.

The rise of white label home loans

The opaque white label mortgage market is difficult to get a handle on, but The New Daily’s inquiries revealed three banks were particularly active in this area: NAB, Macquarie and Bendigo and Adelaide Bank (referred to as Bendigo Bank from now on).

If you have a loan with Lendi, Yellow Brick Road, Mortgage Choice, or LJ Hooker, among others, it’s likely you are really borrowing from one of these three big banks.

The Commonwealth Bank, meanwhile, only offers white label loans through its subsidiary Aussie, while ANZ and Westpac offer no white label home loans. Nor do smaller banks and lenders like AMP, Bank of Queensland, Suncorp, ME or Westpac subsidiaries St George, Bank of Melbourne and BankSA.

The market, then, appears to be dominated by NAB, Macquarie and Bendigo Bank.

These three banks sell their wholesale, unbranded loans through two platforms: online mortgage brokers, and ‘mortgage managers’.

This latter category refers to companies that act as middlemen between banks and mortgage brokers.

The big mortgage managers are not household names, and it’s likely you haven’t heard of any of them. They include National Mortgage Company (NMC), PLAN Australia, FAST, Choice Aggregation Services, Australian Finance Group (AFG), Connective, Smartline, Astute, and Loan Market.

NAB, through its white label business Advantedge, has deals with PLAN Australia, FAST, Choice Aggregation Services, Australian Finance Group, Connective, Smartline, Astute, Loan Market and LJ Hooker Home Loans. It also owns mortgage lender Ubank and provides white label home loans to News Corp’s realestate.com.au.

Macquarie, meanwhile, has deals with Aussie, Mortgage Choice, AFG, Home Loans, Lendi (as ClickLoans), Connective, LJ Hooker and Vow. In Macquarie’s case, white label home loan packages can come with white label offset bank accounts and white label credit cards.

Bendigo Bank refused to reveal which companies it has white label deals with.

While in most cases the true lender is disclosed in the fine print, their branding is often nowhere to be seen. Corporate watchdog ASIC said mortgage brokers are required by law to disclose the true lender. However, the legislation is not clear on the manner of that disclosure.

How HashChing works

In the case of HashChing, the process is quite convoluted. HashChing itself is a mortgage comparison site and platform with a network of several hundred mortgage brokers.

Say you’re looking for a home loan. You go to HashChing, and are directed to one of its mortgage brokers.

That mortgage broker might recommend you go with a HashChing white label home loan.

Now, while that white label loan is currently being lent by Bendigo Bank, HashChing actually has no direct relationship with Bendigo Bank. Its relationship is with NMC, one of the biggest mortgage managers in Australia.

NMC deals with a number of lenders, including NAB and Bendigo Bank, and it decides which bank to use for the white label product. Currently it is using Bendigo Bank, but this could change in the future.

In the context of home loans, the loan is sold as a HashChing loan, branded as an NMC loan on the internet banking website, but actually provided by a bank.

As for how the price is set, The New Daily’s inquiries appeared to suggest the banks were selling loans to mortgage managers on a bulk, wholesale basis – ie for cheaper than they would sell them on the retail market.

It is then up to the mortgage manager to decide how to sell them on. The New Daily requested clarity on how this process worked from both Macquarie and Bendigo Bank, but neither had given clear responses by deadline.

Corporate watchdog ASIC was asked whether it had concerns about the lack of transparency in the white label home loan market, but did not respond by deadline.