A record 69.5% of mortgages in Australia are being arranged by finance brokers rather than by customers dealing directly with banks, according to new research.
The Mortgage and Finance Association of Australia (MFAA)’s latest Industry Intelligence Service report showed that $177.07 billion worth of residential home loans were settled in the 3 months to June 2022.
This is a massive jump over the last half a dozen years, as the number of loans written by brokers was just 53.6% in 2016.
So, why are so many more people turning to brokers to help them with the debt and finance needs?
There’s a few factors driving this trend:
- Value – it costs a loan applicant $0 to engage a broker to work for them, as brokers are paid commissions by the bank. This means that using a broker is 100% risk-free, from a financial point of view.
- Options – if you approach your bank for a home loan, you can choose from a handful of their products. There’s no guarantee their rates, fees or range represents the best value on the market. A broker can present you with a range of options, including home loans with lower fees and/or lower interest rates than your bank offers.
- Advice – as financial professionals, brokers can educate you about different product types, features, benefits and offers, while explaining jargon along the way. For instance, a good broker will explain the benefits of an offset account, or help you arrange a fee-free credit card (if you want one) as part of your home loan package.
- Trust – Brokers are transparent about the fees they earn and it’s against their code of practice for a broker to suggest a particular bank or lender simply because they would earn a higher fee from them. This is known as “best interests duty”, and it’s highly regulated.
At Zippy Financial we thrive on helping people minimise their financial stress and achieve their financial goals. Whether you want to consolidate some debts, refinance your home loan into a better deal or take out a brand new loan to move into your dream home, give us a call and we can help you work out a plan moving forward.
Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.