The Mortgage Finance Association of Australia (MFAA) has announced the highest ever 4th quarter market share for mortgage brokers.
According to data collected by research group comparator on behalf of the MFAA, 59.4% of all residential home loans made in Australia in December 2020 were made by mortgage brokers, representing a 4.1% growth on the same period in 2019 and just 0.7% shy of the all time one-quarter market share, set in September 2019.
Additionally, the total for December 2020 is the highest ever recorded in terms of dollar value, topping out at $64.1bn of new home loans settled across the leading aggregators. That is 23.44% up on December 2019, a total of $12.17bn in real money terms.
The news comes at a time when the housing market is booming, with home loans, house auctions and house prices breaking records for growth in the early part of 2021.
Brokers’ position in the market is also strengthened by strong support among the public: with the Royal Commission into the banking sector having damaged confidence in traditional banks, a survey earlier this year revealed that 94% of the public trusted mortgage brokers with their loan recommendations when refinancing.
“This outstanding market share result, in the traditionally less-buoyant December quarter, reflects the continuing hard work of brokers in supporting their customers to achieve their aspirations and assisting many to refinance and take advantage of record low interest rates, making mortgage repayments more manageable,” said MFAA CEO Mike Felton.
“In addition to providing support during the most difficult months of 2020, this result shows how mortgage brokers were able to facilitate the flow of credit which was so vital to the continuing national recovery as the housing market showed further signs of growth and borrowers re-emerged, including a spike in first home buyers. “As always, I am incredibly proud of the work our industry does to support the economy and help customers realise their home ownership dreams, particularly against the backdrop of such challenging circumstances.
Brokers themselves were quick to celebrate the news.
“Mortgage Brokers have two advantages in their arsenal,” said Raj Ladher, Mortgage Broker at YourMortgageBroker. “Firstly they have a range of lenders whose policy and interest rates can differ considerably. Secondly, they have the know-how along with the personalised customer service.”
“In the main, mortgage brokers are small businesses where a client isn’t just another number. So many of the clients that come through to YourMortgage have already been to their bank and been declined, and we have managed to secure them a home loan which is very rewarding all round.”
The pandemic has exposed how mortgage brokers can be more agile than big banks.
“Covid has certainly changed the ways mortgage brokers do business,” said Raj. “In the main, I would say in a positive way. With clients now becoming more savvy with technology, we are saving so much time.”
“In addition, it has streamlined some bank processes, such as accepting digital signatures and ID verification. All this allows the broker to offer more products and more lenders to their client, which is better for the client.”