Smaller local lenders raised some $15 billion to deploy on mortgages that the major banks would not write last year, as they did not fit strict serviceability standards, restrictions that their chief executives are now fighting to ease.

That was a 30 per cent increase in just 12 months, with non-bank lenders already pricing in $4.45 billion in similar deals in the first three months of this year as wholesale funding markets spur into action and reduce capital costs for the non-bank sector.