Nearly half of all home loans in Australia are arranged by a mortgage broker, but their importance and value is more than just raw numbers.
A recent report commissioned by the Mortgage Industry Group has given people an insight into what the mortgage broking industry brings to the Australian market.
The Value of Mortgage Broking: Assessing the Industry’s Role in the Economy report was released by Deloitte Access Economics and says mortgage brokers have helped to reduce prices and encouraged competition.
“The point of difference for seeing a mortgage broker versus a bank is a broker will offer you a suite of products from a range of lenders,” says The Loan Company general manager Simon Kahl.
“With the Banking Royal Commission causing banks to change their policies on a near-weekly basis, the current environment has become even more confusing for the average consumer to navigate.”
The report found that mortgage brokers give the public access to both large and small lenders and that without them, smaller lenders would need to expand their branch footprint across Australia to maintain their current market share.
“Broker market share continues to grow,” said Mr Kahl.
“Furthermore, the distribution brokers provide as a result of this forces the major banks to stay competitive with both pricing and policy.”
Mr Kahl said the increasing market share for smaller lenders showed the direction the market was heading, with those smaller lenders providing niches the big banks aren’t interested in.
The mortgage broking industry serves a diverse mix of customers the report shows, with around a quarter of mortgage broking customers being first homebuyers and around a third of mortgages organised by brokers being in regional areas where access to banks is limited.
The report found that the mortgage broking industry contributed $2.9 billion to the Australian economy each year and provided more than 27,000 jobs.