Broker use down as borrowers doing legwork

by Adam Smith18 Apr 2012

A new study has claimed that mortgage broker use is on the decline.

The QBE LMI Barometer has indicated that 37% of homebuyers in 2012 have used mortgage brokers to secure their financing. The result is down from 43% in the last survey. The company claimed, however, that the result was not indicative of borrower appetite for broker use. Rather, QBE LMI put the findings down to an increased trend of consumers conducting their own home loan research.

“While consumers may be relying more on their own research, which may be linked to the rise of social media and online capacity for research of financial products, the results do not imply that the appetite for using a broker to broker the loan has declined, rather that consumers are doing more of the research themselves,” the company said.

Cost was the main factor for consumers in selecting a home loan. Interest rate scored an 8.2 out of possible 10 as the motivating factor behind home loan choice, followed by fees at six out of 10.

The report has also found that more than a third of potential first homebuyers would rather jump into the market now than wait to save a deposit.

39% of first time buyers believe it’s better to get into the market immediately rather than wait to save for a bigger deposit. Overall, 55% of Australians say it is important to get into the property market now.

“There remains a clear appetite for purchasing property in the short to medium term nationwide,” QBE LMI chief executive Jenny Boddington said.

The report has also indicated that recent cuts to the cash rate may not have affected overall buyer sentiment, with 59% saying they have yet to feel the impact of the cuts. But RBA action has spurred on first homebuyers. Twenty-one per cent of first time buyers saw the cuts as a signal to get into the market as soon as possible. A further 19% said they were expecting more cuts in the future, and would wait until these filtered through.

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