The Facts about Mortgage Broking
Driven by your needs
- Mortgage Brokers understand that everyone's situation is unique. That's why getting to know you is the most important thing.
- In 2018 mortgage brokers helped Australians secure finance for more than half of all home loans - 59.1% (source: MFAA's Quarterly Survey of leading mortgage brokers and aggregators (Jul-Sept 18) produced by CoreLogic)
- In 2017 over half a million home loans were settled by mortgage brokers. This figure had doubled over the previous 10 years. (source: MFAA IIS Report 5th ed. produced by CoreLogic)
- The Net Promoter Score (NPS) customer satisfaction measure of Mortgage Brokers is in excess of +70 which is outstanding and industry leading for financial services. (Source: MFAA's The Australian Mortgage Broking Industry: Through A Different Lens.)
- Only 1% of consumer credit complaints to the Financial Ombudsman Service between 2013 and 2017 were about Mortgage brokers.
- According to the Credit & Investments Ombudsman, the proportion of complaints made against brokers has dramatically decreased over the last 10 years, compared to the growth in the number of broker members. (Source: CIO Annual Report)
- Over the last five years, Mortgage Brokers have moderated the dominance of the Major Lenders and increased competition by concluding an increased proportion of their business with lenders other than the Major Banks and their affiliates. (Source: MFAA IIS Report 5th ed., produced by CoreLogic)
What do Mortgage Brokers Do?
What exactly do Mortgage Brokers do for their customers?
- Match-Makers - mortgage brokers act as intermediaries. Their main role is to match you with prospective lenders 9such as banks) and financial products (such as mortgages)
- Tailored to you - mortgage brokers provide you with personalised end-to-end service, from initial interview to application, through to settlement.
- A wealth of knowledge - mortgage brokers provide you with information about a range of available mortgage products to help your understanding of the different options, and to help you choose what's right for you.
- Expertise at every step - mortgage brokers assist you with the process to follow when applying for a mortgage.
- Helping negotiate - mortgage brokers act on your behalf to negotiate with lenders to find an appropriate product for you.
- Competitive spirit - mortgage brokers help bring competition to the mortgage industry, providing you access to a range of lenders other than the Big 4.
- Spoilt for choice - mortgage brokers can offer you mortgage finance products from a range of lenders (on average, 34 lenders).
- Great value - typically, consumers don't pay mortgage brokers for the services they provide. Usually mortgage brokers receive a commission from the lender for each home loan they settle.
Support your Mortgage Broker
Sign our petition and contact your local Federal MP in support of mortgage broking
Potential reforms to broker commission are currently being discussed which could result in a blanket ban on commissions (upfront and trail) and the introduction of a customer fee-for-service of thousands of dollars. If enacted, these changes could make the mortgage broker channel unsustainable, forcing customers back to the big banks with large branch networks, and cutting customer access to smaller lenders and credit.
- Increased fees and interest rates for customers – as banks seek to restore their declining interest margins and increase profit without intense competition to keep prices down
- Diminishing availability of credit – especially for customers in regional and rural Australia, where few branches remain, and for lower income customers with more complex credit needs such as first home buyers
- The end of trade for up to 17,000 small businesses, and the resultant loss of up to 27,000 FTE jobs in Australia
Mortgage brokers are critical to competition in the home lending market in Australia.