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Brokers are now less driven to choose a lender based on turnarounds, as time to initial credit decision has improved across the board, new data has found.
Analysis of the latest monthly Broker Pulse survey from Momentum Intelligence showed that the speed at which lenders reach credit decisions is a reducing factor for brokers when choosing a mortgage lender.
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The survey of 221 brokers, conducted between 1 and 15 June 2022, has found that the ability to meet “client circumstances” is the most important consideration brokers have when choosing a lender, followed by pricing and then turnaround times.
For example, only 33 per cent of brokers said that turnaround times were the primary reason they chose non-major banks in May (down from 41 per cent the month prior and 46 per cent in March 2022), with product pricing being the main driver for brokers using this type of lender.
Turnarounds were only a primary consideration for 19 per cent of brokers using non-banks (down from 28 per cent and 30 per cent, respectively), with the ability to meet client circumstances the primary driver for this lender segment.
For the big four banks, turnaround time importance remains steady at 32 per cent – with client circumstances being the primary driver. However, the data showed that product pricing is rising in importance for brokers using the majors.
Noting the findings, Momentum Intelligence director Michael Johnson attributed the drop in focus on turnarounds to the stabilisation of the time taken by lenders to reach an initial credit decision.
He highlighted that the average turnaround times at the large authorised deposit-taking institutions (ADI) (those used by more than 20 per cent of broker respondents) remained at six days in May, similar to March and April.
Turnaround times halved compared to May 2021, when they were at 12 business days (almost three weeks), and significantly improved from 14 days in January 2021.
Macquarie Bank maintained its lead among the large ADI with the fastest turnaround times, with brokers reporting that it reduced time taken to initial credit decision from three days in April to two days in May.
Among the big four banks, CBA retained second spot and reduced turnaround times from four days in April to three days in May, while National Australia Bank’s (NAB) turnaround times remained at four days, and Westpac’s turnaround times reduced from eight days in April to six days in May.
Ubank (formerly 86 400) inched upwards from four days in April to five days in May, maintaining its lead in the non-major bank segment.
Average turnaround times at the non-banks were steady at six days, with Advantedge reclaiming top spot and reducing its turnaround times from four days in April to three days in May.
ANZ most commonly used lender by brokers in May
The Broker Pulse survey for the month of May also found that – despite ANZ ranking last among the big four banks for turnarounds (reportedly taking an average of eight business days to reach an initial credit decision, improving from April when turnaround times stood at nine days, its fastest time for two years) – it was the most commonly used lender by brokers in May.
It marked the first time the major bank has taken the top spot in nearly a year.
After experiencing extensive blowouts in its turnaround times and issues with onboarding new credit assessors, the major bank’s improvements for the broker channel appear to be bearing fruit, according to the latest Broker Pulse survey.
Forty-one percent of all Broker Pulse respondents said they used ANZ over the month of May, the highest of any lender and up from 36 per cent from April. However, this proportion remains drastically down on pre-COVID levels, when more than 60 per cent of brokers would use ANZ in any given month.
The primary reason brokers said they were using ANZ was due to product pricing – with 23 per cent of brokers stating this was a prime consideration (up from 18 per cent in April and March).
Speaking to The Adviser about turnaround times, Mortgage Innovations broker Jason Cuerel commented: “When I look back nine to 12 months ago, there were quite a few lenders who had pushed their turnaround times right out. Commonwealth Bank was out – in the middle of COVID-19 pandemic – to around 14-15 days for a pre-approval, ANZ was pushed right out to five, six, seven weeks which was horrendous.
“The amazing thing right now is that all the banks are super fast. So Commonwealth Bank’s caught up, ANZ has finally caught up, Westpac and St.George are quick – this point right now in the industry is amazing,” he said.
“All the banks are fast and responsive, this is incredible. This is what we love as mortgage brokers; getting a quick answer from the banks so we know if they’re going to lend [our clients] money, so we can keep tracking forwards.”
For more information about the Broker Pulse survey, including how you can get involved in future surveys, click here.
[Related: ANZ turnaround times fastest in 2 years]
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