Report reveals significance of broker channel

Genworth's chief commercial officer, Bridget Sakr, said these figures represent that at some point in the financing process, the broker channel becomes more appealing for many prospective buyers.

“The data suggests that the decision to use a broker is not made early in the process for most people,” Ms Sakr said.

“As prospective first home buyers learn more about the different channels available to them to acquire finance, mortgage brokers often become part of the decision process.”

The report revealed that 33 per cent of home owners who took out their home loan with a lender other than their main financial institution did so because of advice from their broker.

Broker applicants were also significantly more likely to hold their home loan with a lender other than the major banks – 54 per cent, compared to 30 per cent of lender applicants.

The analysis showed that broker applicants tend to save for a deposit for a shorter period of time and save smaller deposits compared to lender applicants.

The three most popular non-savings deposit sources for broker applicants to supplement their smaller deposits were: money gifted or borrowed from parents (18 per cent), inheritance (17 per cent) and personal loans (17 per cent).

A larger fraction of broker applicants also used LMI to obtain their loan – 39 per cent, compared to 17 per cent of lender applicants.

“Brokers are likely educating borrowers with smaller deposits about LMI and how it can help them to get into a home with a deposit as low as 5 per cent,” Ms Sakr said.

[Related: FHB confidence at record high]