Mortgage brokers dominate market
Mortgage brokers are rising in popularity, Image – Canva
  • Mortgage brokers account for 67% of new mortgages written, with expectations to surpass 70% in the coming years
  • Consumer education and awareness provided by mortgage broker contributes positively to market and financial stability, says Pete Wargent
  • Market expected to shift towards variable-rate mortgages and investors, away from fixed-rates and first homebuyers

Mortgage brokers are currently dominating the market, with leading property experts suggesting the trend will continue to strengthen.

New figures from the Mortgage and Finance Association of Australia (MFAA) indicate almost 67% of mortgages written last quarter were assisted by a mortgage broker.

The news comes after the announcement that new mortgage values had grown by 70% in the 18 months to July 2021.

Expected to surpass 70% in coming years

BuyersBuyers CEO Doron Peleg said the rise in popularity of mortgage brokers has been building over the past few decades.

“The advent of the internet and mortgage aggregators really helped to accelerate the use of mortgage brokers, helping consumers to understand the full array of choice in the mortgage market.”

Doron Peleg, BuyersBuyers CEO

He added that the lending market is highly competitive, making perfect sense that borrowers are turning to mortgage brokers for a competitive edge.

“Based on the current climate, and while recognising that the quarterly numbers will inevitably bounce around, there’s absolutely no reason to expect that brokers can’t account for 70 per cent or more of the mortgage market in the coming few years,” he said.

Mortgage brokers benefiting buyer awareness

Co-founder of BuyerBuyers Pete Wargent said BuyersBuyers has observed unprecedented volumes of buyers coming to the buyers agency from mortgage brokers.

“It works best for us because customers are coming to us better informed, with a
greater awareness of their likely strategy, the buffers they need to keep in place, and the possible trajectory of interest rates,” he said.

Mr Wargent emphasised the value of consumer education and awareness, saying it would only be beneficial to financial stability and the housing market.

“We’re constantly building affiliations with mortgage brokers and broking groups precisely for this reason. It’s also a win-win because by engaging a buyer’s agent, we consistently help clients to buy with less time, cost, and stress, and in doing so will invariably increase the conversion rate of mortgage pre-approvals into actual home loans.”

Shift to variable-rate predicted

According to Mr Peleg, the level of interest in fixed-rate mortgages this year had outperformed any year previous.

However, he said the landscape for lenders is currently changing and hence he expects a shift towards more variable-rate mortgages.

“Investors, in particular, like to have flexibility these days, and we’ve seen a sizeable increase in investor clients using offset accounts and redraw facilities.”

Doron Peleg, BuyersBuyers CEO

“2021 was the year of the first homebuyer and upgraders, but we expect investors to be much more active in 2022”.

Over 190,000 first homebuyers entered the market in the 18 months to July 2021, accounting for almost a quarter of new mortgage applications.

Mr Peleg acknowledged that mortgage rates may rise, but emphasised that they would be rising from a record low hence suggesting that worry is unwarranted.

“Mortgage brokers are now operating with a best interest duty as well as offering more choice and consumer convenience, which gives me even more confidence that mortgage broker market share will continue to rise. This is all the more reason for us to keep building affiliations in the mortgage broking space,” Mr Peleg concluded.

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