Mortgage broker market share continues to climb with new data released from the Mortgage and Finance Association of Australia (MFAA) showing a new record of 69.5% of all residential home loans are written by mortgage brokers.
The mortgage broker channel has grown from the previous quarter (December 2021) with 66.5% of all new residential loans being facilitated by mortgage brokers. The March 2022 quarter has seen that figure increase to 69.5%.
It’s no wonder that the mortgage broker market share has grown to almost 70% as the traditional method of going direct to a big bank or second tier lender has been a user experience nightmare following the Covid 19 lockdowns.
Customers looking for a home loan directly with banks have experienced ridiculous call centre wait times, reduced branch access, delayed responses and interest rates that aren’t competitive.
With more banks closing their branches, customers have seen a surge in seeking alternative options to secure their home loan pre-approval or refinance. Mortgage brokers have been well positioned to support borrowers with their application, providing a dedicated service that gives borrowers options from over 40 lenders.
The improvement of ensuring mortgage brokers are helping clients in the best possible way following the Banking Royal Commission, has seen the introduction of the Best Interest Duty (BID). This has helped built trust towards the mortgage broker industry whereby mortgage brokers must ensure that the product and lender the client selects is in their best interest. Ironically, banks do not need to comply with the Best Interests Duty.
Chief Executive of the MFAA, Mike Felton, commented that the results were indicative of a strong, “successful and rapidly growing” industry that has successfully implemented meaningful reforms over a number of years and has the trust and loyalty of consumers.
Whilst a combination of reforms has strengthened the industry and further differentiated the mortgage broker value proposition, I believe it is no coincidence that market share has surged since the implementation of the Best Interests Duty," he said.
"Mortgage brokers have traditionally enjoyed high levels of trust and confidence from consumers that have been assisted by a broker in the past, but have had low levels of trust from those that haven’t.
"The introduction of the Best Interests Duty has however, been a game changer that has provided greater assurance to those that are yet to take advantage of the services of a mortgage broker and I believe this is what is driving the broadening of the available market and a surge in market share.”
“In a rising interest rate and cost environment, mortgage brokers are exceptionally well placed to assist customers in finding a fairer deal that is in their best interests.”