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Conversion rates increase despite credit crackdown

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Charbel Kadib 5 minute read

An increasing number of loans lodged by brokers are progressing to settlement, despite increased scrutiny on mortgage applications, according to MFAA research. 

The Mortgage & Finance Association of Australia (MFAA) has released the eighth edition of its Industry Intelligence Service (IIS) report, which assesses trends in the broking industry by analysing data from 12 of the country’s major aggregators.

The research has revealed that the percentage of home loan lodgements progressing to settlement increased from 72.1 per cent to 73.8 per cent, when comparing the six months to March 2019 to the previous corresponding period. 

The improvement in conversion rates has come despite increased scrutiny in the income and living expense verification process, particularly in response to the banking royal commission.


According to the MFAA, brokers have been quick to adjust to changes in the lending landscape.

“These improvements would suggest that in a challenging market, brokers are positively reacting and responding with increasing agility and precision when lodging their applications,” the MFAA noted.

However, while conversion rates increased, the average number of home loan applications lodged per broker declined, falling by 16.6 per cent over the same period, from a national average of 18 in the six months to March 2018 to an average of 15 in the six months ending March 2019.

Accordingly, the total number of applications lodged by brokers fell 13.3 per cent, from 300,828 as at March 2018 to 260,544 as at March 2019.

As a result, the total value of home loans originated via the broker channel dropped by over $10 billion (10.3 per cent) when compared to the previous corresponding period, falling to $87.5 billion – the lowest six-month value recorded since the MFAA commenced reporting in 2015.


The MFAA research also found that the national average annual gross value of commissions collected per broker dropped 3 per cent over the same period, hitting a historic low of $128,709.

The decline was driven by a 10.6 per cent fall in the average upfront commission received by a broker, down from $75,604 to $67,554 – offset by a 6.9 per cent increase in the average annual gross trail commission received per broker, from $57,189 to $61,155.

[Related: Broker commissions slide to historic low]


Conversion rates increase despite credit crackdown
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Charbel Kadib

Charbel Kadib

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

Email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.


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