Broker satisfaction with lenders plummets: Broker Pulse

The survey of 237 brokers — conducted between 1 and 14 October — found that this trend persisted among both the most commonly used authorised deposit-taking institutions (ADI) (those used by more than 20 per cent of broker respondents) and the most commonly used non-bank lenders.

Out of the 12 large ADIs included in the Broker Pulse survey, nine saw a drop in their broker experience ratings.

This was driven by a drop in satisfaction across various stages of the home loan process including application (satisfaction dropped across seven large ADIs), assessment (satisfaction dropped across nine large ADIs), and settlement (satisfaction dropped across eight large ADIs).

Similarly, brokers assigned a lower satisfaction rating to 11 out of 12 small ADIs, with nine seeing a drop in satisfaction with their loan application process, eight with their assessment process, and 10 with their settlement process.

Non-banks fared better than their counterparts, with only four out of nine lenders seeing a fall in broker experience ratings in September 2022.

Brokers assigned an overall satisfaction rating of only 56 per cent to all lenders, the lowest rating since January 2022 (52 per cent).

The most commonly used ADIs were given the lowest overall satisfaction rating since April 2022 of 61 per cent.

Satisfaction with the most commonly used non-banks fell to the lowest rating on record of 68 per cent, and represented a month-on-month decline of 10 percentage points.

Fewer brokers happy with BDM, credit assessors

After enjoying consistently high satisfaction ratings for several consecutive months, lender business development managers (BDM) and credit assessors experienced the steepest fall in broker satisfaction since January 2022.

While the BDM index dropped to a score of 50 in September 2022 (from a record high of 58 in the previous month), credit assessor scores fell from a record high of 50 in August 2022 to 43 in September.

Macquarie Bank BDMs and credit assessors achieved the highest positive rating of 92 per cent and 91 per cent, respectively.

AMP Bank BDMs tumbled from first place in August to 10th in September as their positive rating fell from 100 per cent to 67 per cent. Similarly, the lender placed last for experience with credit assessors, as brokers assigned a 44 per cent positive rating.

None of the BDMs at the less commonly used ADIs achieved a 100 per cent positive rating, but Great Southern Bank was assigned the highest positive rating of 83 per cent, while seven out of 12 lenders in this segment were given a negative rating.

On the other hand, Connective Home Loans credit assessors were given a 100 per cent positive rating in the most commonly used non-bank segment.

Speaking about the Broker Pulse survey results, Momentum Intelligence director Michael Johnson said: “This month’s data points to some potential changes over the next few months which we will be monitoring closely to provide brokers and lenders with a clearer picture of the competitive landscape as we head towards the end of the year.”

The findings have coincided with the increasingly challenging economic environment as the Reserve Bank of Australia (RBA) raised the cash rate six consecutive times since May (some by up to 50 bps) to 2.6 per cent to curtail rising inflation (which sits at 6.1 per cent).

With many lenders moving in line with the RBA and raising their interest rates following the October cash rate hike, research revealed that 56 per cent of Australian mortgage holders were caught off guard by the extent to which the cash rate has risen as they did not expect it to rise beyond 2.5 per cent.

Treasurer Jim Chalmers recently signalled that the government was concerned about the growing probability of a global recession, adding that Australia would not be immune.

However, AMP economist Shane Oliver warned that if the rhetoric is gloomy from everyone, including the government, Australia risks talking itself into a recession, one that could have otherwise been avoided.

To find out more about the Broker Pulse survey and participate in future surveys, visit the Broker Pulse survey website.

[Related: Borrowing capacity ‘most important’ factor for home buyers: NAB]