Nearly 40% of customers who choose to go direct to banks believe it's more convenient than using a broker, and more than a quarter believe they'll get a better deal.
New research from QBE has revealed why some borrowers choose to deal directly with banks rather than seeking out mortgage brokers. The insurer's 2014 Barometer report shows that 40% of consumers who choose to go direct to a lender believe it is more convenient, 39% believe going to their bank is easier and 26% believe they'll get a better deal.
Of the consumers choosing brokers, the most common reason given is also convenience. Forty-six per cent of borrowers who used a mortgage broker said it was more convenient, while 38% said they used a broker to do research for them and 37% believe brokers find solutions tailored to their needs.
The survey, which polled more than 1,000 mortgagors or consumers intending to take out a home loan, found 63% said they would go to a lender, while only 37% said they would use a broker. This stands in stark contrast to the 50% market share reported by the MFAA, but MFAA head of marketing and communications Stephen Hale told Australian Broker
the association's figures come from lenders and aggregators rather than the random consumer sampling used by QBE.
"MFAA has been tracking broker share through an independent research agency Comparator that is based on loan data from the industry lenders and aggregators. We have seen four consecutive quarters of consistent growth in broker market share, and the latest report details a market share of 50% from 47.3% the previous quarter," Hale said.
In spite of the discrepancy in market share figures, QBE found that younger consumers were more likely to utilise brokers. Of the borrowers under 45 years of age polled by QBE 42% said they would use a broker, while only 28% of those over the age of 45 said they would seek the advice of a broker.
But younger generations also showed a higher degree of trust in their financial institutions, with 49% of first homebuyers who went direct to their bank saying they did so because it was easier.
"Perceived easiness is particularly important to first home owners, suggesting there is greater confidence in the ease of process with main financial institutions amongst those unfamiliar with the mortgage acquisition process," QBE said.