A new report has been released by Momentum Intelligence who embarked on a consumer survey of 5,782 Australian borrowers in December 2018. The ‘Borrower Experience Survey’ endeavoured to uncover consumer attitudes, perceptions and priorities around their most recent experience in securing a mortgage and to understand how this may affect their future decisions in accessing finance.
With the Banking Royal Commission final report due next week, the findings in this report highlight the value consumers receive from mortgage brokers – currently a free service offered to all consumers.
The key takeaway from the report is that consumers are significantly more satisfied when using mortgage brokers than using the proprietary channel.
Consumers were asked which channel they used to secure their most recent mortgage and how satisfied they were with their experience. Of those surveyed, 96% of respondents who used a mortgage broker were either satisfied or very satisfied, with the majority (84%) stating “very satisfied”.
In contrast, only 67% of those who went direct to a lender were either satisfied or very satisfied, of which only 26% were “very satisfied”. Additional consumer research such as FBAA’s MyNextAdvice ‘Client sentiment’ survey (FBAA, 2018) of broker customers found that:
94% were happy with their broker’s knowledge and competency.
93% agreed their broker had their client’s interest at heart
93.6% found their broker understood the borrower’s needs, objectives and financial situation,
92.1% were satisfied with the strength of the broker-client relationship.
Mortgage brokers beat the banks on repeat business
You would be hard pushed to find any other industry with such high customer retention rates. 96% of respondents who had previously used a mortgage broker would choose to use them again. In addition, 63% of the direct to lender customers would choose to use a mortgage broker for their next mortgage.
With close to all of satisfied broker customers choosing to use a mortgage broker for their next transaction, the findings of the survey clearly show strong loyalty to this channel. This high level of customer retention correlates with data released in December 2018 that shows the market share of the mortgage broker channel has reached a new high of 59.1% (MFAA, 2019).
Using a mortgage broker vs direct to bank
The survey revealed that consumers choose mortgage brokers because they believe they are most likely to get the best loan for their needs and that they deliver the widest choice of products. Mortgage broker customers selected the channel because:
60% believe they are most likely to get the best loan for their needs
45.8% believe it is the most convenient channel to get their desired outcome
45.4% believe they will get the widest choice of products that are available
26.9% believe they stand the best chance of getting their loan approved
There is no doubt that mortgage brokers provide consumers with more options and a convenient channel to secure an approval. Mortgage brokers remove the pain points for consumers when applying for a loan, not only from a convenience perspective, but from an expertise level that gives the consumer a greater chance of success. These factors are key, particularly in a tough lending market.