Mortgage brokers settled a record $107.51 billion in residential home loans between April-September 2020, new MFAA stats show.
The Mortgage & Finance Association of Australia (MFAA) has released its latest Industry Intelligence Service Report (IIS), which covers the period 1 April 2020 to 30 September 2020.
According to the 11th edition of the report, which draws on data supplied by 12 aggregator brands, the broker channel settled $107.51 billion in residential home loans for the six-month period, the highest six-month value recorded since the MFAA commenced reporting in 2015.
The figure was up 24.5 per cent year-on-year (or $21.14 billion more), and marked the first time that settlements surpassed the $100-billion figure in a six-month period.
“The significant increase in the value of home loan settlements over the last six-month period has been driven by a combination of increased refinancing activity and first home buyers in the market taking advantage of record-low interest rates, as the impact of COVID-19 took effect,” the report reads.
Similarly, in the 12 months to September 2020, brokers settled over $211 billion in home loans, an increase of $33.3 billion or 18.7 per cent, when compared year-on-year.
It is the highest value of new home loan settlements observed over a 12-month period to date and is the first-time settlements have exceeded $200 billion, according to the MFAA.
Year-on-year, the average value of new home loans settled per broker increased by just over $1.3 million (from $5.2 million to $6.5 million), or 25.30 per cent, the highest increase observed.
Moreover, the average value of new home loans settled per broker ($6,519,850) for the six months to September 2020 was the highest value observed in five years, since September 2015, and was the second highest overall to date.
“This suggests that brokers are settling higher value loans, which in turn has significantly increased the national average,” the report reads.
Period-on-period, the average value of new home loans settled grew by $496,821 or 8.25 per cent.
Overall, the report found that mortgage brokers facilitated 57 per cent of all new residential mortgages in the June 2020 quarter, recording their highest ever market share of 60.1 per cent in the September 2020 quarter.
The IIS report reads: “Since the March 2020 quarter, when COVID-19 and lockdown measures significantly impacted the industry, broker market share has increased by 8.0 percentage points to the September 2020 quarter, the highest growth in market share observed over two consecutive quarters.
“The result provides evidence brokers were successful in adapting and overcoming the significant disruptions to business as usual. They gained market share by responding to an increase in refinance demand and effectively assisting first home buyers, to negate the impacts, changes and uncertainty of COVID-19 on the home loan market and the broader economy.”
MFAA CEO Mike Felton commented: “This result was indicative of a strong performance across the board from the nation’s mortgage brokers throughout the six-month period, as the average number of applications lodged per active broker jumped from 19.6 to 21.4, while the national average value of home loans settled per broker rose above $6.5 million for the first time in five years.
“The broker channel settled $107.51 billion in residential home loans for the six-month period, the highest six-month value recorded since the MFAA commenced reporting in 2015, up 24.5 per cent year-on-year,” Mr Felton said.
“While average trail commission increased mildly compared with the previous year, upfront commissions grew by a significant 25.29 per cent, reaching $84,758 for the period. This helped to achieve a healthy national average combined remuneration per broker of $151,772.
“Overall, April to September 2020 was a challenging and yet rewarding time for the mortgage broking industry, as brokers provided tireless support and assistance to their customers helping them navigate the challenges posed by the COVID-19 pandemic and the recession.”
Broker originated mortgages have been going strong recently, with the prudential regulator recently releasing stats showing that the third-party channel wrote $69.5 billion of new bank loans in the three months ending December 2020, up 28 per cent on the prior comparative period (when the channel wrote $54.3 billion).
[Related: Third-party originated loans rise 28%: APRA]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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