26/02/2025
In recent insights shared by The Adviser, mortgage and finance brokers play a pivotal role in Australia’s economy, contributing more than $4 billion annually while driving competition in the lending market and offering vital financial education to borrowers. A recent study conducted by Deloitte, in collaboration with the Mortgage and Finance Association of Australia (MFAA), reveals the significant impact brokers have in shaping the financial landscape.
Released on 11 February 2025, the “Value of Mortgage and Finance Broking 2025 Report” is a detailed 52-page document that highlights the expanding role of brokers in Australia’s economy. This report, building on earlier research from 2018, provides fresh insights into the growth of the industry and the broader influence brokers have on the market.
Economic Contribution: A Growing Force
The latest report indicates that brokers now contribute $4.1 billion to Australia’s gross domestic product (GDP) each year. This figure includes $3.3 billion in direct value and $800 million in indirect value. When adjusted for inflation, this marks a 14% increase from previous findings. The broker channel employed an estimated 31,899 people directly across the nation by March 2024, with an additional 5,450 individuals supported indirectly.
Furthermore, brokers were responsible for arranging approximately $353 billion in new residential home loans over the 12 months leading up to March 2024. Their work continues to have a profound effect on consumers, providing access to better rates and improving competition in the lending market.
Lowering Borrowing Costs and Educating Consumers
The study also reveals that brokers are not only facilitating access to finance but also playing an essential role in helping borrowers secure lower interest rates. On average, brokers achieve a reduction of 0.35% for their clients through effective repricing strategies. Brokers are also dedicating more time to educating borrowers on loan options and the application process. In fact, 11% of a broker’s time is now spent on financial literacy, helping customers make informed decisions.
This commitment to education is evident in the increasing percentage of first-home buyers using brokers to arrange loans. Since 2018, the proportion of first-time homebuyers among broker clients has nearly doubled, rising from 23% to 45%. This increase shows that brokers are providing valuable assistance to those new to the property market, with around a quarter of the home loan market now comprised of first-home buyers.
The Best Interests Duty: A Positive Change
The 2025 report also assesses the impact of the Best Interests Duty (BID), which came into effect in January 2021. The findings suggest that the regulation has been widely accepted by both industry professionals and consumers. Over half of the brokers surveyed indicated that the introduction of BID has improved trust in the sector, with a notable 10-fold increase in brokers who reported a positive impact on their business compared to those who noted a negative effect.
Brokers have also stated that the quality of their recommendations has improved since the post-royal commission regulatory changes, with some even reporting stronger financial performance as a result. The BID has further strengthened the relationships brokers have with their clients by ensuring that consumer interests remain central to the mortgage process.
Key Findings from the Report
- The number of brokers in Australia has increased by 29% since 2017, with a total of 22,031 brokers working across the nation as of March 2024.
- Nearly 75% of new residential loans in Australia were arranged by brokers in 2024, marking an 18-percentage point increase since 2017.
- The proportion of brokers with qualifications at or above the Diploma level stands at 85%, while 56% of brokers have more than five years of experience.
- Women make up 27% of the broker workforce, while 20% of brokers operate outside capital cities.
- Brokers earn an average revenue of $192,000 before costs, with each broker typically being accredited with 23 different lenders.
- Repeat customers and referrals are significant sources of business for brokers, with 44% of brokers’ clients being repeat customers and 28% coming through referrals.
The Growing Role of Brokers in Commercial Loans
The report also highlights a growing interest in commercial loans, with 13% of brokers indicating that commercial lending now constitutes 25% or more of their total business. Commercial and asset finance volumes have surged by over 20% in recent years, according to aggregators, indicating the expanding reach of brokers into this sector.
Industry Growth and Future Prospects
MFAA CEO Anja Pannek emphasised the value of the findings, noting that the research offers a clear picture of the evolving mortgage and finance broking industry. She noted that brokers are making significant contributions to the economy, particularly through education and assisting borrowers in navigating a complex lending landscape. The growth of the broker industry is also associated with increased competition within the banking sector and reduced mortgage interest rates.
Deloitte’s John O’Mahony further remarked on the connection between the growth of the broker channel and the improved competition in the Australian banking system, highlighting that brokers’ increasing market share is driving positive changes for consumers. James Hickey, another Deloitte partner, urged brokers to continue building strong relationships with clients and to embrace technology, as digital platforms have become a more prominent part of the broking process.
A Thriving Industry
The 2025 report paints a picture of a thriving, ever-expanding industry that continues to deliver value to Australian consumers and businesses. As brokers help millions of Australians achieve their homeownership and business goals, their impact on the Australian economy and the lending market is more significant than ever.
Looking ahead, the industry’s growth, coupled with ongoing regulatory improvements, ensures that mortgage and finance brokers will remain an integral part of the Australian financial ecosystem for years to come. The MFAA will continue to use this research to advocate for policies that encourage competition, protect consumers, and support the continued success of brokers.
Start here: https://finstreet.au/broker-hub/
