A new report from Deloitte has found that 85 per cent of borrowers who went direct to a lender would use the same channel again, rather than seeing a mortgage broker.
The report also found that same percentage of borrowers who used a broker would use a broker again, suggesting a high level of channel loyalty among Australians that have recently taken out a home loan.
However, 20 per cent of direct-to-lender customers said they would change lender while only 12 per cent of broker customers would change broker.
Of the 15 respondents who would change channel, only 5 per cent said they would in future use neither a broker or direct-to-lender channel but instead do it themselves directly via an online platform.
Deloitte surveyed more than 1,000 borrowers who took out a home loan in the last two years and published its findings last week.
Deloitte financial services partner James Hickey said the initial decision by customers of whether to use a broker or go direct to a lender is all about relationships and need.
“Customers said they chose a broker because they had an existing relationship (34 per cent), or were recommended to the broker by family or friends (32 per cent).
Those going to a lender either had an existing banking relationship (58 per cent) or sought the best price (29 per cent),” Mr Hickey said.
“Our view is that the research indicates that broker and direct-to-lender channels, rather than being seen as competing against each other, can actually be viewed as complementary to each other,” he said.
“Customers are choosing to go to either a broker or direct to a lender for quite different and distinct reasons. Broker customers want and value the relationship and support through the process, while direct-to-lender customers have already settled on their choice and are largely seeking best price and features.”
The research was undertaken on behalf of the MFAA and combined an online survey with responses from additional focus groups.
A number of the focus group participants said it was simpler and easier to go through a broker as they perceived that mortgage brokers ‘could get things done faster than a banker in a branch’. Many also felt it was ‘more efficient’ through a broker, as they know which banks are likely to approve their specific loan application circumstances.”
[Related: Commissions probed in new Deloitte report]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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