The third-party industry has reacted to the news that broker market share has risen to 59.1 per cent, noting that borrowers have “voted with their feet” against “drastic change” to the broker model.
Industry leaders have taken the opportunity to highlight the value of the broker channel, following the Mortgage and Finance Association of Australia’s (MFAA) release of new figures by research group Comparator, which revealed that mortgage brokers settled 59.1 per cent of all residential home loans in the September quarter 2018.
Broker market share is up 5.5 per cent from 53.6 per cent in the same quarter of 2017, which represents the largest year-on-year increase for any quarter over the last four years.
Speaking to The Adviser, Loan Market executive chairman Sam White said the data is “great news” for the broking industry, in light of public scrutiny, particularly from the financial services royal commission.
“[The results] mean almost six in every 10 residential home loans in Australia now go through a mortgage broker,” he said.
“This is a great endorsement of the industry right now when there has been so much talk about the value that brokers bring.
“This shows how important brokers are to Australian consumers.”
Mr White added that upward growth in broker market share has persisted in an environment riddled with change and uncertainty.
“Borrowing money is hard, we all know that – credit policies have changed, amongst alterations to living expenses and interest rates are continually moving, but the one thing that is constant is that Australian consumers want to use a broker to get a home loan,” he said.
Also speaking to The Adviser, Australian Finance Group (AFG) CEO David Bailey echoed remarks made by MFAA CEO Mike Felton, noting that borrowers are increasingly looking to brokers for support to make sense of complex nature of the current lending landscape.
“In an environment where credit is at times difficult to find, and also where home loan choices are continuing to be opaque, as the ACCC has indicated, customers need the services of a mortgage brokers,” Mr Bailey said.
“The person best equipped to handle customer enquiry around changing market conditions is a mortgage broker.
“They have the tools, they have the experience and they have the options available to all customers.”
The AFG CEO added that brokers are being rewarded for their hard work.
“I think it’s another pointer to the fact that customers are embracing their mortgage broking channel, as a means of accessing home finance,” he said.
“It’s reflective of all the hard work that brokers do on a day-to-day basis to help their customers.”
Mr Bailey stated that he believes the continued growth in broker market share is proof that borrowers do not approve of “drastic change” to the industry model amid the threat of reform.
“What these numbers reflect is the fact that customers are very happy with the channel, and I would suggest that – based on this increased level of engagement with the channel – they would be very disappointed and shocked to see any drastic changes to the model,” he said.
Also speaking to The Adviser, Susan Mitchell, CEO of Mortgage Choice, said consumers are “voting with their feet” and choosing to secure a home loan with the help of a mortgage broker.
“I know our Australia-wide network of Mortgage Choice brokers will see this significant increase in broker usage as testament to the exceptional work they do in helping Australians make better choices for a better life,” Ms Mitchell said.
Both Ms Mitchell and Mr White said that they expect broker market share to continue rising, with Mr White predicting market share growth of 70-80 per cent in the coming years.
Ms Mitchell concluded: “As housing affordability continues to challenge home buyers, I expect more consumers to seek out the services of mortgage brokers who continue to offer choice, expert advice and valuable services during the increasingly complex journey to home ownership.”
[Related: Broker market share hits record high]