Brokers spurring lending competition

by AB13 Aug 2013

The latest home loan industry market share figures demonstrate what many Australian Broker readers no doubt already knew: brokers are key to driving competition in the mortgage market.

Figures produced exclusively by comparator for the MFAA, show that brokers are now providing 23% of all home loans to borrowers on behalf of smaller banks and other lenders.

The big fours’ share of the home loan market through brokers is 77%, compared with their overall share of the market at 80.2%, which the MFAA says indicates brokers are  opening up the market to other lenders for the benefit of consumers.

Brokers lifted their provision of loans in the home loan market during the June quarter by 24% from $24.7 billion (June quarter 2012) to $30.6 billion, maintaining their share of the market at 45%.

“The figures clearly show brokers are crucial in enhancing competition and consumer choice as regional banks, independent and international banks and non-bank lenders are sharpening their offerings and using brokers to attract consumers,” says MFAA CEO, Phil Naylor.

“The increased expertise and expansion of broker and aggregator networks shows that lenders, especially those outside the big four, are increasingly working with the brokers to get to market and gain share.”

The comparator figures, generated from data supplied by Australia’s 19 largest brokers and aggregators, show that independent regional banks have 9.1% of the broker home loan market, followed by international banks (4.5%); brokers’ white label loans (3.1%); other independent lenders (2.6%); non-bank lenders (2.5%); and credit unions, building societies and mutuals (1.3%) – totalling 23%.

“There is no doubt mortgage brokers are now firmly established as the key facilitators of competition in the home loans market,” says Naylor.