Today, the Mortgage & Finance Association of Australia released the latest edition of its sought-after Industry Intelligence Service (IIS) report.
Featuring data for the 1 April – 30 September 2023 period, the report provides insights on the mortgage and finance broking industry including the size of the mortgage broker population, the value of loans settled and lender segment market share.
MFAA CEO Anja Pannek said that despite the period covered in the report being one marked by continued high refinancing levels and borrower concern about interest rates, mortgage broker activity remained strong.
“Our industry is growing, with more mortgage brokers than ever before, and positive shifts recorded across a number of aspects of the industry during the period covered in the report,” she said.
“The choice and competition mortgage brokers have brought to the home lending market to the benefit of consumers shines through in this data.”
Settlement values for mortgage broker originated home loans surpassed $300 billion for a 12-month period for the second time, at $350.63 billion to September 2023.
The mortgage broker population grew 3.3% year-on-year to 19,872. Seven out of ten home loans were written by brokers during the six-month period with the September 2023 quarter recording a 71.5% market share.
However, the conversion rate of home loan applications to settlements has seen a decline, indicating that serviceability challenges are taking a toll on prospective homebuyers seeking finance.
“While overall home loan applications are up across most of the country, we hear consistently from our members that serviceability has been a challenge for their clients as they adjust to current interest rate levels," Ms Pannek explained.
Conversion rates recorded a second consecutive six-month period of decline, experiencing a 9.2 percentage point dip year-on-year and falling below 80% for the first time since 2021.
"The downward shift in conversion rates highlights this it's harder to get deals through, with much more work required on the part of mortgage brokers to find the right solution for their clients,” Ms Pannek said.
The report also covers the extent of commercial lending facilitated by mortgage brokers.
While the number of mortgage brokers who also settled commercial loans during the period declined, the value of those loans reached a record high at $17.29 billion.
For the first time since the measure has been tracked in the IIS, the market share of the major banks fell below 40% for the period covered in the report.
"This result indicates that borrowers are more confident to go through lenders outside the big four to secure a loan that meets their needs," said Ms Pannek.
"There are over 100 lenders in the market today, and it is because of brokers that Australian homebuyers have access to a wide range of lenders. It is also clear that this choice is a valued and important part of the market."
The IIS report draws on data supplied by the industry’s leading aggregator brands to provide mortgage broker, industry performance and demographic data.
The IIS was first published in 2015, this is the 17th edition.
