Why do Australians choose mortgage brokers?

It’s a moment in life loaded with meaning; and even the most confident and well informed of us can become befuddled by lending processes and terminology. We do our best to equip ourselves for the journey, but there are always many issues to consider.

"Buyers don’t want a complicated process; they want to know what the best options are based on their situation so they can apply for a loan with more confidence."

Will the Reserve Bank of Australia lift or cut interest rates? What are the various interest rates offered between lenders? What are the price movements across suburbs? Will I get a house near the school I want? Can we get one near the train station?

One resource many of us use to navigate these issues is the mortgage broker.

According to a report by the Mortgage and Finance Association of Australia (MFAA) Industry Intelligence Service, mortgage brokers wrote 67.2 per cent of all new residential home loans between April and June this year.

Agile Market Intelligence’s Consumer Access to Mortgages Report (2022) also found 86 per cent of broker customers surveyed were satisfied with their experience.

At ANZ, we value our partnerships with brokers and the role they play in supporting Australians to achieve their home ownership goals. There are more than 19,000 brokers across Australia and a significant number accredited are ANZ.

But what is the appeal of mortgage brokers for home buyers in Australia? And why do people turn to brokers for help with the biggest purchase most of them will ever make?

Confidence with finances

We all know the feeling. We do some research online and suddenly feel even more overwhelmed by the volumes of content available to guide us.

In the current environment where such information is freely available, borrowers turn to brokers for guidance, convenience and choice.

One third of borrowers want brokers to educate them on the home buying process and almost a half say the most valuable thing their broker can do is explain the different loan options, according to a report by the aggregator Connective and sponsored by ANZ.

Buyers don’t want a complicated process; they want to know what the best options are based on their situation so they can apply for a loan with more confidence.

The modern shopper is generally used to being assertive online. In any week some of us might buy clothes from the UK, book a hotel in Bali or invest money in a US fund.

Home buyers want to be active and informed in the same way. But due to the complexity of the process and the size of the purchase, they want a human being to provide industry expertise and help them weigh up their options.

About 85 per cent of borrowers surveyed by Connective-ANZ wanted their broker to make them feel at ease during the process. While the research showed mortgage seekers expect the lending process to become increasingly online, they still prefer a personal connection as part of the process.

Buying a home symbolises much about the life many of us want to build for our loved ones – and yet the actual loan application process can seem cold, robotic and transactional.

A broker can also help here, to provide support and personalised service – someone who is reliable, credible and can be trusted to act in customers’ best interests.

Cutting through complexity

The housing market is not static and what was sound advice two years ago can quickly date – especially amid the current environment and rapidly changing economic conditions.

The research shows borrowers want brokers to help them by understanding their full set of needs so they can pick the best mortgage for their personal circumstances.  

This includes staying close to customers to support them as their priorities and property goals change. For instance, using data a broker may reach out to a customer before their fixed rate expires.

As a lender, we must continually enhance the tools and digital solutions we offer to help save time and ensure a great experience for brokers and customers.

Technology and artificial intelligence may bring changes in the sector, but there will always be the need for a human touch.

Digital solutions may result in less paperwork, faster updates and more transparency. But many borrowers will continue to want the reassurance and support a broker can provide.

While the market changes and the technology surrounding it develops, the role of the broker will remain relevant.

Natalie Smith is General Manager, Retail Broker at ANZ