Non-bank lenders also appear to be faring well in the mortgage market over recent months.Discussion with several "aggregators" late last week suggests non-bank lenders are winning some market share at the expense of the smaller banks, while the big four gain slightly.Ray Hair, general manager at PLAN Australia, said there was a two per cent decrease in the market share of new business directed to the big four to 48 per cent for the twelve months ending May 2007, and a large increase in the share of non-bank lenders at the expense of the smaller banks.Hair says in response as to why the big four lost market share, "the primary driver was NAB, which had a much stronger performance in 2006."Non-bank lenders have increased market share during the year, as PLAN has added regional lenders to its panel." Hair explained that PLAN set out to sign up more non-bank and regional lenders over the last year or so."Non-bank lenders have brought to the panel what our members want, providing quality regional service with strong branding they are familiar with."Gerald Foley, managing director of National Mortgage Brokers, said the big four's percentage of all loans written has grown only very slightly over the past twelve months.Commenting on where Foley sees the biggest improvement, "definitely a marked improvement in the second tier banks and major non-bank lenders. This is due to competitive pricing tactics and marketing, aimed at improving brand awareness to potential borrowers, and strong support of the broker channel."Growth in commercial lending and pricing by the big four has also been very competitive, and we see movement within the non-bank lender tier as the bigger, more established players improve at the expense of the small, lesser known non-bank lenders".Foley said, "Often there can be a spike in lending by the big banks heading up to 30 June as professionals borrow for tax related purposes, often preferring to use the more well known institutions."He said the March quarter often produced a spike in new business for non-conforming loans as people seek to consolidate debt for start-of -year expenses such as school fees or Christmas excesses.Kevin Matthews, executive director, national operations, at Australian Finance Group, said there has been a two percentage point increase in loans sourced to the big four banks for the year ending May 2007, increasing from just over 48 per cent a year ago to 50 per cent. "A major factor in the big banks getting an increased market share is branding, with borrowers at times accepting a slightly higher interest rate when making their decision, and borrowing from a known institution where they see the bank's market presence on street corners."The two percentage point increase by the big four came at the expense of the smaller banks with their market share dropping to just over a third, with non-bank lenders remaining around the same 14 per cent level year on year."When the smaller banks have a great offer, they must back this up with good service and