More than a quarter (28%) of homebuyers saw mortgage brokers first before financial institutions when they bought a property this year, up from 16% in 2017, according to new data from Mortgage Choice and CoreData. Conversely, consumers who sought financial institutions first dropped from 60.7% to 44.2%.
Results came from an online survey of more than 1,000 participants in March this year. Data also revealed that 43% of home or property buyers who saw a mortgage broker first are between 25 and 45, an increase from 30% last year.
Western Australia had the highest broker usage. More than a third (36%) of buyers there consulted mortgage brokers when purchasing a property. This was followed by New South Wales at 30%.
“For many Australians, the first point of contact in the home buying journey is the lender they currently bank with, but our data shows that the use of mortgage brokers continues to rise,” Mortgage Choice spokesperson Jacqueline Dearle said in a statement.
Mortgage Choice sees the 12% increase in the proportion of home buyers seeking the services of mortgage brokers as an "encouraging indication" that consumers see greater value in what brokers have to offer.
Simplicity in a complex market
An increasingly competitive mortgage market is also a factor for why people seek the help of brokers, according to Dearle.
Amidst the many complexities involved in the home loan process, Dearle sees mortgage brokers as having the ability to "save borrowers time, hassle and possibly money by finding a suitable solution for their individual financial situation and goals and taking the legwork out of the application process".
And unlike financial institutions with limited home loan products, mortgage brokers can access an extensive panel of lenders so they can compare various mortgages.
“Whether someone is just starting out on their property journey, or they have purchased property before, the lending environment is increasingly complex, and on top of that, Australians are increasingly becoming time-poor,” Dearle said.
They educate, too
Dearle also credits mortgage brokers for going beyond providing guidance through the home loan process, and taking time to educate consumers about the market.
She pointed to data showing consumers are well aware of what brokers can offer in terms of better customer service and expert credit advice.
The data also reveals that through mortgage brokers, consumers know they are getting competitive home loan products that are "tailored to their unique set of circumstances and goals".
"With many benefits to be had, I would expect consumer demand for mortgage brokers to remain strong in the coming years," Dearle said.