Australia's largest non-bank lender, Pepper Homeloans, has ruled out speculation it is eyeing the book of RHG but says it is open to acquisitions.

Chief operating office David Holmes said: "We are not actively looking at them [RHG] at this moment in time and want to bed in GE. But that's not to say if something comes up that we wouldn't look at it."

Pepper purchased GE's remaining mortgage book for about $5 billion last month to boost its portfolio to more than $7 billion.

Mr Holmes said it would continue to expand other parts of business, such as its third-party loan servicing operation.

From this week, Pepper has also changed the interest rates across its suite of loans in preparation for the ban on exit fees from July.

Mr Holmes said the ban would reduce innovation in the mortgage sector and stop the offer of honeymoon rates, where Pepper had previously offered a 1 percentage point discount in the first year. Its Flexi Advantage product will offer an 8.25 per cent interest rate for up to a 65 per cent loan-to-value ratio, down from 8.99 per cent for loans up to a 60 per cent LVR.

The Self-Employed Advantage loan will carry an 8.45 per cent rate for a LVR up to 65 per cent, down from a 9.24 per cent for a LVR of 60 per cent and lower.

Mr Holmes said Pepper would continue to focus on the self-employed and non-conforming loan customers who fall just outside the credit criteria of major banks. "It would be very hard to compete with the majors in price in the prime space," he said.

Other non-banks are using new distribution methods to reduce costs. Non-bank lender FirstMac launched the website loans.com.au to sell mortgages but maintains loans under its own brand.

In preparation for the exit fee ban, other non-banks have changed their commission arrangements with brokers or say they will absorb the cost and wear lower margins.