Mortgage brokers need to stand tall and continue to fight for their customers, the Founder and Managing Director of 1300HomeLoan has urged.
John Kolenda said brokers revolutionised Australia’s home finance sector over the past three decades and can continue to find their customers the best deals.
With criticism currently surrounding the broker industry, Kolenda said brokers need to unite and promote competition to get the cheapest rates.
One of the suggestions to come out of the industry scrutiny from the last few months has been changes to the way brokers are paid. Kolenda said the impact of this needs to be considered, particularly how this would affect the dynamic between smaller and larger lenders. He added that smaller lenders need to be supported, as they are important in driving competition.
He added: “Small lenders are currently hugely disadvantaged on funding costs, which favour the major banks and they don’t have the retail footprints to compete against them and nor do they have the large marketing budgets to attract new customers.
“There are concerns that regulation is too much in favour of the major banks and there needs to be a balance between protecting the financial systems and promoting fair competition.”
“Any moves to change the commission-based system will only damage the broking industry and leave consumers without the adequate support and guidance to obtain the most competitive home loan.”
Calling the lending landscape a “minefield” he added: “How can consumers navigate through the more than 3800 offerings in the market place without the assistance of brokers? A consumer dealing directly with a lender has limited negotiating power or knowledge of the interest rates and lending criteria offered by competitors. A mortgage broker with access to a panel of lenders drives competition between lenders to the benefit of all consumers.
“The main consideration should always be the consumer and their access to products and services from a broad range of lenders which can compete for consumers business. The foundation of the broking industry is the customer comes first. Even the major banks have acknowledged that brokers are instructed by and act on behalf of the customers.”