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70% of home buyers turned to a mortgage broker

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70% of home buyers turned to a mortgage broker.

The move towards mortgage brokers and away from direct lenders by borrowers is continuing to increase, with new data showing that mortgage brokers accounted for nearly 70% of the market share last quarter.

The data from the Mortgage & Finance Association of Australia (MFAA) suggests a growing preference among borrowers for mortgage brokers with the trend likely to continue in the future.

Between January and March 2023, brokers wrote 69.6% of all new residential home loans – the highest March quarter on record.

Strategic advisor from broker coaching business Broker Ideas Group, Ash Playsted, said it’s inevitable the broking market will eventually reach a market share beyond 80% because what brokers do is “irreplaceable”. “The broking industry will continue to expand and soak up more and more of the total mortgage settlement volume, so absolutely no surprise, it's great to see and may it continue.” he said.

Mr Playsted said in the past, major banks viewed brokers as competitors to their proprietary channels, investing significant resources in advertising their direct lending options. However, he said a shift had occurred with lenders now accepting the role of brokers.

“Banks are now making a conscious decision to cut back on branches and staff in branches and have accepted that people are voting with their feet and would prefer a broker to do the leg work than for them to walk into a branch and do it themselves,” he said.

Mr Playsted said that the rise in broker market share has coincided with the introduction of best interests duty (BID), which is a new law that requires mortgage brokers to act in the best interests of the Australian consumer, when providing credit assistance.

He said the professionalisation of the industry – highlighted by the introduction of BID – had started to flow over into the public perception of the broker’s role.

“Having been in the industry my whole life and met and worked with literally thousands of brokers, it is very rare to actually find a broker who doesn't operate that way anyway,” he said.

“The fact that it’s talked about and that it’s an obligation now is a good thing.

“It’s all about best practice and this is what I love about the broking industry and where it’s heading.”

Mr Playsted said in an age where information is readily available and consumers can easily access product prices and features online, it’s easy to assume that the value proposition of brokers is waning – yet the data suggests the opposite is actually occurring.

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