The vast majority of mortgage customers are more satisfied with their mortgage experience when they use a broker over a lender and are generally not concerned with the current remuneration structure.
The findings come in a new research paper from Momentum Intelligence, the Consumer Access to Mortgages Report, which is set to be released this evening.
The research - which pulls on a range of data sources including the recent Borrower Experience Survey that was promoted widely across relevant Momentum Media brands - asked broker and bank customers about why they used a broker or went directly to a lender, what their experience and sentiment was around broker commissions and, importantly, what their satisfaction levels were with the distribution channel they used, among other topics.
In total, 5,782 respondents completed the survey and the responses were collated and formed the backbone of Momentum Intelligence’s the Consumer Access to Mortgages Report, which is set to be released this evening.
The key objective of the final report is to establish whether borrowers have benefited from the growth of the mortgage broker channel and the impact of the current broker remuneration model on consumer outcomes.
It also considers what impact a change in broker remuneration would have on the viability of the third-party channel and, ultimately, how that would impact borrowers.
An early finding of the report is 96 per cent of borrowers who had used a mortgage broker in their most recent mortgage experience were either “satisfied” or “very satisfied” with their experience.
This is compared to 67 per cent of borrowers that had secured a mortgage directly through a lender.
The research will also found that the vast majority of consumers - 79 per cent - have no concerns with the commission structure of brokers.
However, it shows that more than half (58 per cent) of borrowers would not be prepared to pay a fee for service.
Moreover, just 3.5 per cent of consumers would be willing to pay a fee equivalent to the average upfront mortgage broker commission, which is currently paid by banks.
The full findings of the Consumer Access to Mortgages Report - a white paper commissioned by The Adviser - are to be revealed at an exclusive industry event in Sydney this evening (31 January).
The launch event will bring together key stakeholders, leading representatives and influencers of the mortgage broking and lending sectors.
Speaking ahead of the event, Momentum Intelligence director Alex Whitlock commented: “Throughout the banking royal commission, we have heard much speculation around the various practices and renumeration structures of broker businesses and the perceived impact they have on customer outcomes.
“This research is really all about the customer perspective, something we feel has been missing from this whole debate. It is clear that the vast majority of Australians see great value in service provided by a broker. They also believe that they get a better outcome using a broker than going directly to the lender,” Mr Whitlock said.
“This survey was conducted during the height of the Royal Commission where broker remuneration was very much at the centre of many of the hearings. Despite this, the vast majority of consumers still have no concerns about how their broker is paid," he said.
Further information and findings from the report will be released on The Adviser website on Friday, 1 February - the same day that the Governor General will receive the final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
It is hoped that the new Consumer Access to Mortgages Report from Momentum Intelligence will help inform policy makers of the value proposition of brokers and provide them with a further understanding of consumer attitudes to the mortgage experience.
[Related: The Adviser launches major borrower survey]
Annie Kane is the editor of The Adviser, Australia’s leading magazine for mortgage brokers.
As well as writing news and features on the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker podcast and In Focus podcasts and The Adviser Live webcasts.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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