Mortgage Choice reports second-highest settlement figures

According to the figures for the six months ending 31 December 2020, Mortgage Choice saw settlements rise 21 per cent on the prior corresponding period from $5.0 billion to $6.1 billion, averaging more than $1 billion per month.

More than half of the $6.1 billion ($3.2 billion) was settled in the last three months of 2020, up 9 per cent when compared with the September quarter.

When comparing 1H21 to the prior six months (2H20), settlements were up 22 per cent.

According to Mortgage Choice, the results reflect growth in settlements in line with a more buoyant housing market and growing scale across its franchise network.

Speaking to The Adviser about the figures, Ms Mitchell added that the increase in settlements could also be attributed to the fact that a record proportion of borrowers are seeking out brokers for mortgage advice, as well as the brokerage’s investments in recruitment, marketing campaigns and technology during COVID-19.

Ms Mitchell noted that the group had seen an increase in loan writers over the COVID-19 period (to 516 loan writers) while loan administrators up 5.4 per cent to 407 (versus 19 December). 

She said: “We’ve made a lot of IT enhancements – 450 to our broker platform alone – to help make brokers much more efficient so that they are able to settle more. Our brokers are already the ones that settle the most in the market; they have the most productivity [for a major brokerage].  

“So, the tools and support that we have rolled out for them have helped them serve more of the market by being more efficient.”

Mortgage Choice’s loan book at the end of December 2020 was $54.1 billion.

However, this was only marginally up on the previous half, as “run-off of existing loans offset new settlements”, and was down from $54.3 billion in 1H20.

Ms Mitchell noted that this was attributed to an “unusually high number of customers electing to refinance their loans or reduce their loan balances due to COVID-related uncertainty and reduced interest rates”.

The financial results show that there was an 18.5 per cent spike in run-off due to an increase in COVID-19 related savings and record refinance activity.

However, Mortgage Choice said it expects this will “likely plateau in future periods with growth in the network” and as economic activity resumes.

Ms Mitchell concluded: “We have turned the corner on growing the network, with the investments we have made starting to pay off.

“National leads are up 121 per cent and at record levels, which bodes well for the second half as we look to deliver exceptional customer service through a combination of digital engagement and personalised, human service. Along with further efficiency improvements, this sets us up well to deliver sustainable growth for our shareholders.”

She added: “Our focus remains the same as it was six months ago; everything we’re doing is about improving our broker proposition and growing our footprint, and getting our brokers to get more profitable businesses. It’s just really simple.”

The figures from Mortgage Choice echo those released by other aggregation groups in recent weeks. 

Finsure and PLAN Australia recently revealed record settlement figures, while Aussie recently stated that settlement volumes rose by 11 per cent to $17.7 billion for the 2020 calendar year.

The figures come as Australia experiences record levels of mortgage applications and refinances.

Owner-occupier home loan commitments have also been hitting new highs, as federal and state government measures such as the HomeBuilder grant and First Home Loan Deposit Scheme, as well as record-low interest rates, are supporting ongoing growth in housing loan commitments.

[Related: Mortgage Choice, digital lender partner for white label]