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• MPA Online

While direct is the most popular channel, mortgage brokers are gaining ground with first home buyers, according to the latest Bankwest/MFAA Home Finance Index.

The index found 26.2% of respondents use mortgage brokers for their first loan, but this figure increased to 44.8% among respondents below age 30.

"This may be due to a variety of factors, such as less established relationships with banks among young people," said Phil Naylor, CEO of MFAA.

The index polled 850 people on a various issues relating to the economy and the housing market. It found that while there is strong competition between the direct and third party channels, banks are narrowing the gap when it comes to customer satisfaction.

"Banks have adopted some of the strategies of mortgage brokers, and have placed a greater emphasis on personalised service and customer relationships," Naylor said.

He added that the trend of banks adopting broker-style customer service sent a message to the broking industry that complacency is not an option.

Satisfaction with mortgage brokers is now at 7.4 out of 10, with banks rating 7.1. Building societies continue to enjoy high levels of satisfaction with a ranking of 8.9 - followed by credit unions on 7.9.

When asked about the benefits of using a mortgage broker, respondents had a variety of reasons:

* They do all the leg work for you (74.2%)
* They are experts in a range of mortgages from numerous lenders (69.2%)
* They have a wider loan range (68.8%). 

Head of Mortgages at Bankwest, Dean Gillespie, said that while first time buyers were more likely to intend to use brokers for their next loan (33.8%), this is not the case with second time buyers (25.0%) who may require less support.

"There's a perception that mortgage brokers can guide first time buyers to the right loan product, whereas more experienced buyers seem to be confident to deal with the bank direct," Gillespie said.

The survey also found there was a greater awareness among consumers of the benefit of using an accredited mortgage broker.

"Respondents increasingly think it is important to discover whether a mortgage broker is a member of an industry body before using them to arrange a loan (85.8%), continuing an upward trend from 72.3% in April 2008," Gillespie said.
 
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