Broker clients overwhelmingly believe brokers act in their best interests and would recommend them to friends and family, new bank research has found.
According to new research conducted for MyState Bank, 90 per cent of broker clients believe mortgage brokers act in their best interests and 91 per cent would recommend the services of brokers to family and friends.
The findings were drawn from a September 2021 survey of 517 Australians who had used a mortgage broker in the past three years.
Conducted by Pureprofile on behalf of MyState Bank, the research aimed to better understand the borrower experience, particularly given that approximately 60 per cent of all loans come through the broker channel.
It found that 86 per cent of broker clients surveyed were either very satisfied or satisfied with the experience of securing a mortgage through their broker.
According to the survey, the top-rated reasons for using a mortgage broker were:
Noting the findings, MyState Bank’s general manager of banking, Huw Bough, said: “As people look for ways into the competitive housing market, many are seeking the assistance of a mortgage broker to help them navigate the loan process, and secure the best deal as fast as possible.
“Affordability is the challenge for many Australians, but particularly first home buyers. Brokers are critical to the health of the housing market in Australia.
“Brokers provide consumers with information about products, access to competitive interest rates and offer significant support as people secure a loan and then their home. They also increase competition between lenders, making the market work better.”
The research also found that broker clients would look to alternative lenders for competitive financing.
For example, 86 per cent of respondents said they were comfortable being offered a loan from outside the “Big Four”. Indeed, the most recent Broker Pulse survey from Momentum Intelligence shows that a falling proportion of brokers is sending loans to the major banks.
Mr Bough commented: “The property market has been fuelled by a combination of factors. These include record low interest rates, Australia’s negative gearing system, extra savings from forced lockdowns and support payments from the government. We’re also seeing intense competition from lenders offering better deals and cashback.
“Australians are taking more control over their money and want to find a better home loan deal.”
MyState Bank’s research found that borrowers had embraced online lending, with eight in 10 people surveyed saying they were very comfortable with an entirely online mortgage process.
Mr Bough highlighted that the bank had a goal to use technology to provide easier and quicker access to home loan services, “with the aim of fast two-business day conditional loan approval turnarounds”.
The high levels of broker satisfaction and advocacy echo findings from Momentum Intelligence’s Consumer Access to Mortgages report for 2021.
Now in its third year, the Consumer Access to Mortgages survey included responses from 1,036 consumers between January and April 2021.
It found that 60 per cent of all borrowers intend to use a mortgage broker the next time they take out a mortgage, with 83 per cent of broker clients saying they would return to this channel again in future.
However, the Consumer Access to Mortgages survey also found that while broker client satisfaction was still higher than borrowers using the proprietary channel, the levels of satisfaction had fallen 16 percentage points on the 2020 survey.
The lower levels of satisfaction correlated highly with frustrations around speed of approvals for loans via the broker channel. Indeed, while borrower satisfaction with speed of approval was low across the board, (at just 57 per cent overall), these figures were better for proprietary customers (61 per cent) compared to broker customers (53 per cent).
The issue reflects publicly acknowledged turnaround time disparities between the two channels, which were particularly prevalent at the time of the survey.
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