Mortgage brokers originate more than half (approximately 55%) of all home loans and investment loans now. [1]
This compares to the early 1990’s where broker market share was only around 15%. (you can learn more about the background to the industry here)
Brokers tend to deliver superior choice, service/expertise and relationships, which explains our popularity. Also clients benefit from this without having to pay anything (our commissions get paid by the banks, at no cost to our clients).
- Choice – there is a lack of transparency on fees/charges and features of mortgage products, and how interest rates are set. Brokers help clients sift through 3,500+ offerings in the marketplace, to secure superior consumer outcomes.
- Service/expertise – most brokers are small business owners, they are available outside regular business hours, and they are incentivised to deliver superior service, to help grow their businesses (this is less common for salaried bank staff). Brokers are also well placed to advise on strategies and structures aligned to achieving personal/financial goals (rather than just delivering a cookie-cutter transactional service). They are also incentivised to provide assistance through the life of the loan, rather than just at the beginning of the process.
- Relationships – getting a mortgage is a complex process which can take several weeks or even months to implement. Brokers are better placed to deliver long-term relationships with clients, which then makes subsequent dealings (loan maintenance, and new purchases/refinances etc.) far more straightforward. Banks find this difficult to match, because their staff invariably ‘move on’, and then clients are passed to the next person in the role.
At the end of the day borrowers should obtain finance from whomever can deliver the best outcome and experience.
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[1] “How High Could Brokers’ Market Share Go”, Mortgage Professional Australia, https://www.mpamagazine.com.au/sections/market-talk/how-high-could-brokers-market-share-go-243827.aspx (accessed January 10, 2018)
