Mortgage brokers are writing more new home loans for the major banks than they did in 2015, according to the latest figures from the prudential regulator.
APRA’s Quarterly ADI Property Exposures report, released at the end of November, found the majors approved $75.2 billion over the September quarter this year, of which $36.4 billion (48 per cent) was originated through the third-party channel.
This compares to 46 per cent of major bank loans originated through brokers over the September 2015 quarter, where brokers wrote $34.0 billion of the major banks' combined $73.4 billion in new residential mortgages.
APRA figures show that brokers increased their share of all ADI originations over the year from 47 per cent to 49 per cent.
In the September 2016 quarter the third-party channel originated approximately $1.6 billion more in new bank home loans than the September 2015 quarter.
The figures come after the second edition of the MFAA's bi-annual Industry Intelligence Service (IIS) report revealed a net gain of 750 brokers to the industry (5.8 per cent growth) at the same time as a mild softening (-1.5 per cent growth) of the broker-originated home loan market.
The results were based on a survey of more than 11,000 brokers from 13 leading broker groups in the six months to 31 March 2016, and offers insight for brokers looking to benchmark their performance.
The report found that 17 per cent of brokers did not settle a single new loan over the six-month period, but noted that these were likely 'dormant' or part-time brokers, who offer broking alongside their main business.
On average, however, the report found that brokers lodged 20 new loan applications, held a home loan portfolio worth $38 million, and brought in up-front and trail commissions of around $140,000 annually, before overheads.
Brokers settling less than $2 million in new loans were among the 35 per cent falling into the 'low settlement rate' category, while 40 per cent of brokers were middle-of-the-range, with more than $5 million value.
At the apex, just one in five brokers signed more than $10 million of new loans and one in 20 settled more than $25 million.
The IIS report aims to identify trends and help brokers advance their businesses, MFAA chairman Cynthia Grisbrook said.
“It is a strategic imperative of the MFAA to provide members with valuable tools and key metrics to assist their business. We look forward to continuing to share information about how broker businesses perform, and where the industry is headed,” she said.
Despite the overall softening, brokers have continued to take share from lenders' direct channels, reaching a high of 53.7 per cent of all new residential lending during the March quarter.
[Related: Bank CEO praises broker loan quality]
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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