The Value of Mortgage Broking – Deloitte Access Economics report

Today, the Mortgage Broking Industry Group* (MBIG) has launched The Value of Mortgage Broking, a report by Deloitte Access Economics.

This report demonstrates the value that our industry brings to consumers, lenders and the Australian economy, by driving competition and delivering greater choice and valuable services to the Australians who need them most.

The Value of Mortgage Broking report was commissioned by MBIG to help all Australians – from financial regulators to everyday home buyers – better understand the role and value that mortgage brokers bring to the Australian market. Given the ongoing scrutiny on the industry during 2018, it is critical that we have a credible and independent report that clearly outlines the importance of the broker channel.

You can click here to view the report on the Deloitte Access Economics website.

The key findings of the report comprise:

  • Mortgage brokers strengthen the entire Australian mortgage lending industry by fostering competition and therefore supporting all Australian home buyers and investors.
  • The mortgage broker channel has contributed to a fall in lenders’ net interest margins of more than three percentage points over the past 30 years.
  • More than 90 per cent of customers are happy with their mortgage broker’s performance.
  • Mortgage brokers arrange more than half of all home loans each year, and this number continues to grow.
  • Mortgage brokers, on average, have 13.8 years of industry experience.
  • Mortgage brokers drive competition by improving access to?lenders that are not major banks or their affiliates. The share for these lenders increased from 21.4 per cent in 2013 to 27.9 per cent in just four years.
  • The average mortgage broker has access to 34 lenders and uses an average of 10 lenders on their panel, bringing more choice to Australian home buyers.
  • Three in ten mortgages arranged by mortgage brokers are for customers in rural or regional areas, improving access to home lending for rural and regional Australians.
  • The mortgage broking industry contributes $2.9 billion to the Australian economy each year, supporting more than 27,100 (full-time equivalent) jobs.
  • Brokers that are sole traders earn an average income after costs and before tax of $86,417.Brokers depend on strong relationships – more than 70 per cent of mortgage brokers’ business is referred from existing customers.

These findings clearly demonstrate the value and service you are delivering to your customers – a testament to the hard work and dedication of the broking industry across the country.

To make it easy for you to digest and share the key findings from this report with your customers, you can click here to download:

The MBIG member groups are also working with the media, government and industry stakeholders to share the findings of this report far and wide, and we will continue to leverage this report as we advocate on your behalf over the coming months and years.

If you have any questions about this report, or would like further details, please contact

* The Mortgage Broking Industry Group (MBIG) comprises AFG, Astute Financial, Aussie, Choice Aggregation, Connective, FAST, Finance Brokers Association of Australia, Loan Market, Mortgage & Finance Association of Australia, Mortgage Choice, National Mortgage Brokers, PLAN Australia and Smartline.

Mortgage Index – June 2018 – The new normal

Today’s quarterly AFG Mortgage Index figures (ASX:AFG) show it is ‘business as usual’ as a vibrant mortgage broking industry delivering choice and competition to the market continues to be embraced by Australian consumers.

Total mortgage lodgement numbers for the last quarter were up on the prior quarter to finish the 2018 financial year at 28,896. Lodgement volume for the quarter increased on the previous quarter to $14,589,632,848.

AFG Chief Executive Officer David Bailey said regulatory intervention in 2017 and tightened lending criteria appear to have established a structural change that may be the ‘new normal’ for the market.

“Investors are sitting steady at 28% of lodgements, first home buyers have been at 13% for the past four consecutive quarters,” said Mr Bailey. “Refinancers are at 22% and upgrader categories at 43% are also forming an established pattern.”

Mortgage holders are also taking advantage of low interest rates to pay down the principal with P&I loans sitting at 81%.

The popularity of fixed rates has fallen with a drop to 15.5% for the quarter recorded, down from 26.4% in the first quarter of FY18.

“A sign that regulators will welcome is the drop in Loan to Value Ratios across the states, with the national LVR now at 67.9%,” he said. “Another pleasing aspect of these figures is the fact that the gap between major and non-major lenders continues to shrink.

“Non-major growth across multiple categories – investors, refinancers and upgraders suggest consumer comfort with looking outside of the Big 4 for a lending proposition that meets their needs.

Interest rate, loan features, fees and lender criteria are all key features for a consumer evaluating their options. A mortgage broker is uniquely placed to be able to efficiently and fairly compare the alternatives available across major and non-major lenders. “As outlined in the ACCC Residential Mortgage Price Inquiry Interim Report 1, discounting by the major banks is lacking in transparency and the time and effort required for a consumer to obtain interest rate comparisons and negotiate for a discount is very difficult,” said Mr Bailey.

“The presence of the mortgage broking channel is one of the few drivers of competitive tension in the Australian lending market. 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, not just their own clients” he concluded.

Download full report here


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Official cash rate unchanged at 1.5% for July

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

The economy appears delicately poised with slow wages growth, low inflation, a slowing housing market, tighter lending policies and high levels of household debt now leading some economists to believe that the next rate change could be down. Contrasting this, we have seen some lenders increase rates out of cycle, citing an increased cost of funds as the reason. Until the RBA sees a strong economic lead one way or the other it is highly likely to continue to leave rates as they are.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to?get in touch with an AFG broker.