Broker loyalty maintains strength

The Consumer Access to Mortgages 2023 report, released by Agile Market Intelligence in association with the Finance Brokers Association of Australasia (FBAA), has found that loyalty to the broker channel remains a strength for the industry, with new research finding that 83 per cent of broker clients would use a broker for assistance with a future mortgage.

The fifth annual edition of the research was conducted between 13 and 27 September and used a sample of 1,263 responses that included 776 current mortgage holders and 487 non-mortgage holders. The research aims to explore the attitudes, perceptions, and priorities of Australian consumers in a bid to better inform industry stakeholders.

It found that 66 per cent of the 252 people who had taken out a mortgage in the last 12 months had used a mortgage broker, with 25 per cent going online and only 9 per cent using a bank branch.

While customer satisfaction across both broker and proprietary channels for borrowers who secured their mortgage in the last 12 months was similar – at 75 and 74 per cent – the mortgage broking channel saw a higher rate of extremely satisfied clients. Nearly a third (31 per cent) of broker clients were extremely satisfied with their overall home loan experience, compared to 25 per cent for the proprietary channel.

Moreover, broker loyalty levels were at 83 per cent in the last 12 months – only marginally below the previous year’s 90 per cent. This was higher than the 79 per cent who said they would use the bank branch again for their next loan and the 74 per cent of those who would get their next loan online again.

The majority of borrowers who had previously used a broker (68 per cent) said they would speak directly to a broker when looking to take out another mortgage in the future. Around 14 per cent of broker clients said they would research options online and then apply through a broker, with only 8 per cent stating they would apply directly at a bank branch.

Meanwhile, borrowers who applied directly with a lender either through a bank branch or online had marginally lower levels of loyalty to their channel. Around 26 per cent of borrowers who applied directly through a lender online said they would do so again for their next mortgage, compared to 21 per cent for those who applied directly at a bank branch.

Just over a quarter of those who previously applied online directly either with a bank or lender said they would use a mortgage broker if they were to take out another mortgage in the future.

‘The difference between lenders and brokers lies in relationships’: Peter White AM

According to the report, “clients who feel a sense of connection and trust with their broker and lender will be most likely to return to the channel”.

FBAA managing director Peter White stated it was important for brokers to continue to develop their relationships with clients.

He commented: “The difference between lenders and brokers lies in relationships and this has never been more important than now.

“Ensuring that we have a regular, strong, and trust-based relationship with our customers will lead to the best outcome of all.

“The report found that loyalty and trust were strong enough to lead the majority to speak directly with their broker rather than researching online.”

As previously reported, the level of trust that borrowers have in brokers remains high – even though it has decreased slightly over the year, falling from 87 per cent in 2022 to 86 per cent in 2023.

However, the report also found that only four in 10 people who are thinking about buying a home for the first time would choose the mortgage broking channel for their finance – a figure that the FBAA said was room for improvement.

[Related: Trust ‘key to client loyalty’: FBAA]