Why are more borrowers using mortgage brokers?

“This duty ensures that brokers prioritise their clients’ needs above all else, providing them with a level of assurance and trust that may be lacking when dealing directly with lenders,” Chambers said.

Both he and Luke Whitbread, Mortgage Choice Erina & Wyong group director and mortgage broker, said the rise in market share could “be attributed to the diverse range of products [brokers] offer”.

“[These products] cater to a broader spectrum of borrowers, and their proactive retention strategies, which prioritise maintaining long-term relationships with clients, [provide] ongoing support and personalised service,” Whitbread said.

“These factors collectively contribute to the growing preference for mortgage brokers over traditional bank channels among consumers seeking mortgage financing.”

Chambers added: “When borrowers go directly to a lender, they are limited to the products and interest rates offered by that specific lender. In contrast, mortgage brokers have access to a diverse array of lenders, including major banks, regional banks, credit unions, and non-bank lenders,” Chambers explained.

“This allows brokers to explore various options and find a loan that best suits their clients’ needs in terms of interest rates, fees, features, borrowing criteria, and turnaround time.”

Others, such as director and finance broker at Prosper Finance, Rory McCann, said that it was the knowledgeable assistance that brokers provide in "every phase of the loan acquisition process, starting from initial consultation to settlement and further".

"This active involvement in simplifying [the client's] financial journey creates a sense of trust and loyalty between the customers and the brokers as the borrowers feel at ease, supported and guided.

"These days with the increasing trend of banks closing their physical branches and supporting the broker channel, customers have been turning to mortgage brokers as convenient alternative for obtaining mortgage financing.

"This cuts short their bank visits, hassling paperwork and dealing with complex jargon," McCann added.

Resolve Finance mortgage broker and franchise owner Niti Bhargava suggested that while there could be "various reasons" for fluctuations in mortgage broker market share, factors like shifts in interest rates, changes in regulations, economic conditions, and competition among lenders can influence it.

“Additionally, consumer preferences and behaviour, as well as advancements in technology, may also play a role in shaping market dynamics,” she said.

What do the aggregators think?

Them Lam, AFG head of sales & distribution, told The Adviser that the new record in broker market share “validates that the broker channel in Australia remains strong and the primary choice for Australian consumers as they provide guidance in an uncertain market”.

“Given the state of the nation with interest rates remaining stable, [and the] constraints for consumers in not knowing if rates are going to go up or go down, having someone that they can turn to for guidance – whether its refinance or fund a new purchase – with expertise on their side works best for the consumer to find the most suitable product and home loan for them,” Lam said.

“I think that’s imperative in the current economic climate.”

Mortgage Choice CEO Anthony Waldron said it was “fantastic to see” broker market share reaching new heights, adding: “This record market share demonstrates that borrowers continue to see their broker as a critical partner in navigating the complex home loan process, especially in a market where higher interest rates have made it harder to get a loan,” Waldron said.

“Our Mortgage Choice brokers report that as the property market has regained momentum, borrowers are seeking support and guidance to find the right loan product and to understand the impact higher rates have on serviceability.

“We expect these high levels of demand to continue as speculation about future interest rate cuts increases.”

From a lender perspective, Siobhan Williams, Pepper Money's head of mortgages, retail broker, said the new record was unsurprising.

“Despite the increasing pace and intensity of changes that impact borrowers, mortgage brokers have remained committed in navigating these shifts and helping their customers to succeed," she told The Adviser.

“The milestone underscores the value that borrowers place on having a trusted and experienced expert in their corner – in an era where trust and expertise is respected more than ever.

“Brokers will continue to play an important role in bridging the gap between the complex world of mortgages and the aspirations of countless individuals and families to buy property. Their expertise isn’t just about numbers; it’s about turning aspirations into keys that unlock front doors," Williams concluded.

Complementing the MFAA's findings, previous research released by Agile Market Intelligence in association with the Finance Brokers Association of Australasia (FBAA) - the Consumer Access to Mortgages 2023 report - revealed that 86 per cent of mortgage broker clients trust their brokers, with 44 per cent saying they had "complete trust".

In contrast, 73 per cent of consumers that dealt directly with lenders said they trusted their representative, with only 27 per cent indicating "complete trust".

[RELATED: Mortgage broker market share reaches 71.8%: MFAA]