Mortgage brokers now arrange more loans than lenders do directly.
59.7 per cent of home loans are now arranged by mortgage brokers rather than by someone applying directly through their bank, according to Corelogic research.
And the trend looks set to continue, with some industry-insiders predicting, ultimately, brokers will arrange 75 per cent of loans.
In the immediate future much of this will be driven by a stabilising property market. This, combined with the banking regulator allowing an easing of lending standards, means that brokers should soon be arranging even more loans.
Australians are voting with their hip pocket. According to Deloitte Access Economics research, The Value of Mortgage Broking 28 per cent of loans arranged by brokers are for lenders other than the Big Four (and their affiliates)
The research shows that over the past three decades, Net Interest Margins have reduced by over three percentage points as brokers have encouraged competition in the lending sector – thereby benefitting the borrower.
However, as the broker market grows, broker responsibilities are also increasing. The corporate regulator, ASIC, is requiring greater scrutiny of expenses; Open Banking will enable fintechs to compete aggressively; and while lending is getting easier, it’s far from plain sailing.