Nine out of 10 clients said they were satisfied with their experience of using a broker and would use one again in the future, according to a new report.
The 2022 Consumer Access to Mortgages Report has been released in partnership with The Adviser by Momentum Intelligence, which is the research arm of Momentum Media (the parent group of The Adviser).
The report — the first of which was launched in 2019 in response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry — seeks to examine and compare the experiences of Australian borrowers using mortgage brokers and the proprietary channel (direct).
The 2022 report measured their overall levels of satisfaction with and trust in each of these channels, and outlined which channel they would prefer to use if they were to apply for another loan in the future.
The survey of over 450 consumers conducted between January and April 2022 found that 65 per cent used a mortgage broker the last time they took out a mortgage, while 35 per cent approached a lender directly.
Among those who used a broker, 86 per cent reported feeling satisfied with their experience.
This compared to 76 per cent who reported feeling satisfied with their experience when using the proprietary channel.
Similarly, a higher proportion of broker clients (47 per cent) reported feeling “extremely satisfied” with their overall experience compared to just 28 per cent of proprietary channel consumers. Conversely, only 39 per cent said they were “satisfied” with their experience using a mortgage broker, compared to 48 per cent of proprietary channel consumers.
Trust levels in brokers rose this year, with 87 per cent of consumers reporting that they trust their brokers, up from 84 per cent in 2021 (but down from 89 per cent in 2020).
Broker loyalty on the rise
Reflecting the high satisfaction rates and trust levels in the third-party channel, 90 per cent of clients who previously engaged with a mortgage broker said they would do so again in the future (up from 83 per cent in 2021), while only 10 per cent would switch to the proprietary channel, according to the report.
On the other hand, only 67 per cent of consumers who approached a lender directly for their mortgage application said they would do so again (up from 61 per cent in 2021), while a third of all respondents said they would switch to the broker channel.
“This year’s survey results have not only revealed significantly higher retention rates in the mortgage broker channel than the proprietary channel, but have also underscored the potential for each channel to entice dissatisfied customers from their counterparts and grow their client base,” the report author Michael Johnson outlined.
Broker communication beats lenders
Communication continues to be a key asset for brokers, with 85 per cent of their clients reporting feeling satisfied with their level of communication, compared to 72 per cent of proprietary channel customers.
The report noted that while respondents have always desired ongoing communication from both channels throughout the home loan process, lenders have been closing their branches and reducing their networks (particularly in regional and rural Australia).
“Herein lies an opportunity for brokers to increase their lines of communication with clients using their preferred method (including in-person meetings, video conferences, or phone calls),” the report read.
Weighing in on this year’s findings, Momentum Intelligence director Mr Johnson said: “Over the last couple of years, brokers have been committed to helping their clients navigate the uncertain environment during the COVID-19 pandemic and the evolving property market.
“Throughout this period, brokers have supported their clients during the mortgage application and settlement process, whether they were purchasing their first home, subsequent primary residence, or investment property, or refinancing their property.
“Clients have responded accordingly and reported higher levels of satisfaction and trust in their brokers. As a result, brokers have significantly higher retention rates compared to the proprietary channel, which opens doors to generating repeat business.”
To read the full 2022 Consumer Access to Mortgages report, click here.