Over the past week, we’ve seen much debate about the role that brokers play in the role of homeownership.
For 30 years, Aussie has passionately been on the side of the borrower, and for over a decade Lendi has helped customers easily achieve a better outcome when it comes to their mortgage.
For many Australians, the task of financing a home is, the biggest financial decision they’ll ever make often, complex, overwhelming, and time consuming.
Having the financial literacy and acute understanding of how complex the lending process can be is not a burden we should expect every purchaser to carry.
For decades mortgage brokers have supported home buyers in navigating the home loan market, where finding the right product amongst a myriad of options can save borrowers thousands in interest repayments, and in a high interest market, help keep the Australian dream alive, and manage households cost of living.
The mortgage broking industry lives and breathes for the sole purpose of the customer, and the fact they are voting with their feet is the clearest indicator of the industry’s success. Since 2021 when the Best Interests Duty act was introduced, we have seen broker market share spike from 59% to as unveiled just last week, a record high of 74%, with this growth largely based on a word-of-mouth.
However, it is the role brokers play beyond just securing a better interest rate that is embedding them even further into the life cycle of home ownership and the grind of monthly mortgage commitments.
Brokers spend considerable time and energy preparing purchasers to be in the best position possible by working out how they can consolidate debt and provide suggestions around alternate pathways for entering the marketing including via the many complex options such as type of home loan, which lender and product suits them best and for first home buyers navigating their way through the use of gifts, guarantors and grants.
Every day, brokers use their experience to determine what kind of loans are most suitable and look at a wide array of options that best suit the purchaser while educating on the complexities surrounding fees, insurances and contract terms. Brokers will even help customers understand if that renovation they have been thinking about will add value or not.
Since May 2022, Australia has seen 13 RBA interest rate rises and during this time it’s been brokers who have been by the side of customers.
During a cost-of-living crisis brokers have seen countless borrowers trapped with their current lender and susceptible to uncompetitive rates, causing significant stress for millions of Australians.
When the fixed rate peaked last year, and around 50% of mortgage holders were due to roll off ultra-low rates, it was brokers actively reaching out to ensure borrowers could move onto the best possible rate, often dealing with customers who wanted to know why their lender hadn’t contacted them.
In the six months between August to February 2023, as rates continued to rise month on month, Lendi Group’s platform saw total lodgements of same-lender refinancing increase by 200%. It was brokers who helped these customers release themselves from higher rates and achieve an average of 68 bps with their existing lender.
Our Aussie and Lendi brokers have assisted more customers in finding a better deal driving up 6 in 10 refinances on a better rate outside a big four bank across 2023. As a result, we’ve seen the spread of loyalty tax being driven down over the past 18 months from 70bps to 10bps.
Brokers are good for customers.
What’ we’re seeing in the industry is big banks grappling with a NIM problem, not a broker cost problem, because they went to war through pricing and cashbacks, focused on price to get customers in – but not looking after them in the longer term; driving their own customers to seek help from a mortgage expert.
The mortgage broking industry has applied the right amount of pressure on the lender to create much needed competition that delivers better pricing, services and outcomes for customers.
About Aussie
Aussie was founded in 1992 by John Symond and was widely credited for bringing competition to the Australian home lending industry. For nearly 30 years, Aussie Brokers have put progress within reach of more Australians, helping over one million customers with their home loan. Today, Aussie has the largest retail footprint of any mortgage broker brand in Australia. For more information about Aussie, please visit Aussie.com.au