04/12/2024
Mortgage brokers in Australia have achieved a new milestone, with their market share hitting a record 74.6% of all new home loans written in the September 2024 quarter, according to recent data from the Mortgage & Finance Association of Australia (MFAA). This marks an increase of 3.1 percentage points compared to the same period in 2023, solidifying the growing preference for brokers among home loan borrowers.
A Record-Setting Quarter
The latest data reveals that mortgage brokers have continued to expand their market dominance, surpassing the previous record of 74.1% set just months earlier in the March 2024 quarter. This sustained growth reflects a clear upward trend in the use of brokers, which has become an increasingly popular choice for borrowers navigating the often complex landscape of home loans.
The data, compiled by Comparator from the value of loans settled by leading brokers and aggregators as a percentage of the Australian Bureau of Statistics (ABS) Housing Finance commitments, also shows that the value of loans written by brokers has surged to a new high. Brokers collectively wrote $103.2 billion in mortgages during the quarter, marking a significant 10.02% increase from the previous year. This is the second consecutive quarter in which brokers have originated over $100 billion in mortgages, further demonstrating their growing influence in the Australian home lending market.
Why Are Brokers Gaining Popularity?
Anja Pannek, CEO of the MFAA, commented on the result, attributing the success of mortgage brokers to their ability to provide tailored advice in a complicated and dynamic market. According to Pannek, brokers offer more than just help in securing competitive interest rates; they provide personalised guidance that helps borrowers make informed decisions throughout the entire home loan process.
“Mortgage brokers are the preferred choice for borrowers navigating today’s complex lending environment,” Pannek said. “They offer much more than just finding the lowest interest rate—they help borrowers understand their financial options, identify opportunities to adjust household budgets, and find solutions that best meet their needs.”
Mortgage brokers are also bound by the Best Interests Duty, a regulation that ensures they act in the best interests of their clients, further solidifying the trust they’ve built with Australian borrowers. This duty requires brokers to consider all available options before recommending a loan, offering an extra layer of protection for consumers.
A Vital Channel for Lenders
The increasing reliance on mortgage brokers is not just benefiting borrowers; it’s also proving essential for lenders. According to Pannek, brokers play a critical role in distributing mortgages, with their growing market share indicating the importance of their role in the broader lending ecosystem.
“MFAA’s data demonstrates the indispensable role mortgage brokers play – not just for borrowers, but for lenders as well,” she said. “This market share result reinforces that brokers are at the heart of Australia’s home lending system, driving access, competition, and personalised solutions in a dynamic and challenging environment.”
Brokers offer lenders access to a wide and diverse pool of borrowers, which is particularly valuable in today’s competitive mortgage market. This increased market share also highlights how brokers have become a key part of lenders’ distribution strategies, helping them maintain their presence in an ever-evolving sector.
The Future of the Broker Channel
As mortgage brokers continue to capture a larger portion of the market, their role in the Australian housing finance sector is becoming ever more crucial. With rising interest rates, a volatile property market, and shifting borrower needs, brokers provide the expertise and support that many Australians are looking for to help navigate the challenges of home ownership.
Looking ahead, the continued growth of the broker channel seems likely, as more and more borrowers turn to brokers for their extensive knowledge, personalised service, and the ability to access a wide range of loan options. This trend, along with the ongoing rise in the value of loans originated by brokers, suggests that the third-party mortgage market will remain a key driver of the Australian home loan market for years to come.
The new record market share for mortgage brokers in the September 2024 quarter reflects both their growing importance in the Australian mortgage market and the increasing preference for their services among home loan borrowers. With a proven ability to navigate a complex lending environment, provide valuable advice, and act in the best interests of their clients, mortgage brokers are set to remain at the heart of Australia’s home lending system.
