Broker market share has hit new heights, with 70 per cent of all new residential home loans written by mortgage brokers, according to MFAA data.
A record breaking proportion of borrowers are accessing mortgages through the broker channel, new data from the Mortgage & Finance Association of Australia (MFAA) has found.
The industry association commissioned research group comparator, a CoreLogic business, to determine broker market share for its quarterly broker statistic series.
By calculating the value of loans settled by 18 of the leading brokers and aggregators as a percentage of ABS housing finance commitments, the researchers found that mortgage brokers facilitated 69.5 per cent of all new residential home loans in the three months to March 2022 (the March quarter).
The previous record was set in the previous quarter (ended December 2021), when 66.5 per cent of all new residential loans were facilitated by brokers.
The latest quarterly data demonstrated that borrowers are increasingly turning to brokers for mortgage assistance – and at an accelerating pace.
Indeed, the March 2022 figure represented a 20 per cent increase on the same quarter in 2021 – when broker market share was 12 percentage points lower (at 57.5 per cent).
The increasing popularity and dominance of the mortgage broker market are also reflected in the volume of loans being settled; with $88.10 billion of loans being settled in the three months to March.
This was the highest value of new settlements observed for a March quarter and represented a 41.54 per cent year-on-year increase ($62.25 billion of resi loans were settled in the March quarter in 2021). However, the largest-ever quarterly settlement figure was achieved in the December 2021 quarter, when $95.95 billion of loans were settled, when the property market was booming.
The outgoing chief executive of the MFAA, Mike Felton, commented that the results were indicative of a strong, “successful and rapidly growing” industry that has successfully implemented meaningful reforms over a number of years and has the trust and loyalty of consumers.
Noting that broker share had been increasingly markedly each quarter over the past year, Mr Felton added that "these ongoing increases in market share reflect an industry that is a force for good and one that has implemented many significant changes over the more than five years.
"Whilst a combination of reforms has strengthened the industry and further differentiated the mortgage broker value proposition, I believe it is no coincidence that market share has surged since the implementation of the Best Interests Duty," he said.
"Mortgage brokers have traditionally enjoyed high levels of trust and confidence from consumers that have been assisted by a broker in the past, but have had low levels of trust from those that haven’t.
"The introduction of the Best Interests Duty has however, been a game changer that has provided greater assurance to those that are yet to take advantage of the services of a mortgage broker and I believe this is what is driving the broadening of the available market and a surge in market share.”
He continued: “Not only does the consumer benefit from the significant choice, experience, and convenience offered by a mortgage broker, but – on home loans taken out since 1 January 2021 – they have been protected by an unrivalled best interests duty, further differentiating the channel and providing yet another compelling reason to use the services of a mortgage broker,” he said.
“In a rising interest rate and cost environment, mortgage brokers are exceptionally well placed to assist customers in finding a fairer deal that is in their best interests.”