the adviser logo

Conversion rates increase despite credit crackdown

by Charbel Kadib5 minute read

An increasing number of loans lodged by brokers are progressing to settlement, despite increased scrutiny on mortgage applications, according to MFAA research. 

The Mortgage & Finance Association of Australia (MFAA) has released the eighth edition of its Industry Intelligence Service (IIS) report, which assesses trends in the broking industry by analysing data from 12 of the country’s major aggregators.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The research has revealed that the percentage of home loan lodgements progressing to settlement increased from 72.1 per cent to 73.8 per cent, when comparing the six months to March 2019 to the previous corresponding period. 

The improvement in conversion rates has come despite increased scrutiny in the income and living expense verification process, particularly in response to the banking royal commission.


According to the MFAA, brokers have been quick to adjust to changes in the lending landscape.

“These improvements would suggest that in a challenging market, brokers are positively reacting and responding with increasing agility and precision when lodging their applications,” the MFAA noted.

However, while conversion rates increased, the average number of home loan applications lodged per broker declined, falling by 16.6 per cent over the same period, from a national average of 18 in the six months to March 2018 to an average of 15 in the six months ending March 2019.

Accordingly, the total number of applications lodged by brokers fell 13.3 per cent, from 300,828 as at March 2018 to 260,544 as at March 2019.

As a result, the total value of home loans originated via the broker channel dropped by over $10 billion (10.3 per cent) when compared to the previous corresponding period, falling to $87.5 billion – the lowest six-month value recorded since the MFAA commenced reporting in 2015.

The MFAA research also found that the national average annual gross value of commissions collected per broker dropped 3 per cent over the same period, hitting a historic low of $128,709.

The decline was driven by a 10.6 per cent fall in the average upfront commission received by a broker, down from $75,604 to $67,554 – offset by a 6.9 per cent increase in the average annual gross trail commission received per broker, from $57,189 to $61,155.

[Related: Broker commissions slide to historic low]


Conversion rates increase despite credit crackdown
tick document ta
TheAdviser logo
tick document ta

Charbel Kadib

Charbel Kadib


Charbel Kadib is the news editor on The Adviser and Mortgage Business.


You need to be a member to post comments. Register for free today


mark lewis fast ta llosc4

In Memoriam: Mark Lewis, 1963–2022

Mark Lewis passed away on Saturday (13 August). Mr Lewis was a well-known identity in the third-party broker...

anthony waldron mortgage choice ta ithtxm

Broker expertise key for securing right loan: Mortgage Choice

The data, which is derived from a June survey of 1,002 broker customers and conducted by Honeycomb Strategy,...

Mark Bouris new ifa

Brokers need to focus on the ‘value-add’: Mark Bouris

With competition among brokers increasing as the number of brokers rises – coupled with the fact that fewer...

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more