The mortgage broking industry has received the strongest vote of confidence ever in Australia, with 55.8% of all mortgages in Australia being written by a mortgage broker in the quarter ending July 2019 according to the latest data released by research group Comparator.
This increase in use of finance brokers has been driven by customers wanting to get a better understanding of the options available on the market, the value of having a professional who can streamline the application process and also help them through the life of the loan when it comes to requesting further discounts, reviewing their loans and refinancing.
As housing affordability, cost of living and increasingly complex processes are rolled out in the application of residential mortgages, mortgage brokers provide a vital service for no cost, helping more Australians get into a home loan sooner.
Market analysts believe this trend is set to continue with an increasing growth in second-tier lenders who are largely growing their business from mortgage brokers, as well as decreasing branch availability of the mainstream lenders.
What is the history of mortgage broking in Australia?
In Australia we have seen the mortgage broking industry rise from humble beginnings to become the dominant market provider of lending financial services. The modern mortgage broking industry largely came about in the 1980’s as RMBS loans came onto the market, allowing lending intermediaries to have lending products on offer which were otherwise not available from main street financial institutions. These original brokers were unregulated and had limited abilities in had small panels of lenders and loan products, and for the most part had to charge a fee to their clients for their services.
As second tier lenders began to grow in Australia and provided competition to the Big 4 lenders in Australia (CBA, ANZ, NAB and Westpac), standardised commissions began to emerge, allowing brokers to earn revenue without having to charge fees to clients. This lead to professional bodies, aggregators and broking groups to solidify in Australia creating what is now a strong regulated, educated and professional industry helping Australians to achieve their goal of home ownership.
Why should you consider using a mortgage broker?
- Access to more lenders than you can access directly
- Access to more thousands of products, instead of a handful of products that any one lender can provide
- Most brokers charge no fees, whilst dedicating their time to finding the right loan products which can help buy your next home, save money and pay it off sooner
- As home loans and lenders become more complex, a good mortgage broker can help you understand what is the right lender for your needs based on interest rates, fees, features, online banking features, fixed vs variable interest rates, the ability to draw equity in the future etc.
- Mortgage Brokers are part of your local small business community, putting more money back into the local community
Are you looking for a mortgage broker in Perth who can help you with your current home loan or help you apply for your next one? Contact us today for a discussion on how you can building a better financial future.