Today, MFAA CEO Anja Pannek and Naveen Ahluwalia appeared at the Senate Economics Reference Committee's Inquiry into the Financial and Regulatory Framework and Home Ownership hearing.
They appeared with MFAA members Ello Lending and Mortgage Choice highlighting the important role of mortgage brokers in helping prospective home buyers and opportunities to improve policy and regulatory settings with the goal of improving home ownership
Ms Pannek's opening statement to the hearing is below.
MFAA opening statement delivered by Anja Pannek
Thank you, Senator Bragg,
We are here representing the MFAA’s over 15,500 members and we are pleased to be appearing with two of them, Mortgage Choice (part of the REA Group) and Ello Lending.
Australians are increasingly choosing mortgage brokers to meet their home loan needs with brokers facilitating 73.7% of all home loans in Australia, an increase of 16.7% since 2020.
Mortgage brokers make the mortgage market work better. Whether it be helping prospective first home buyers or existing homeowners, our members help them to navigate the complexities of the home loan market.
The role of a mortgage broker extends well beyond the transaction of a loan application. For first home buyers this includes education on how to enter the market sooner, explaining government grants, lenders mortgage insurance or other options available. In fact, 79% of first home guarantee scheme applications flow through brokers.
We believe that every prospective home buyer should see a mortgage broker for the benefits that only a broker can provide.
Importantly, a mortgage brokers’ ability to access dozens of lenders and hundreds of products drives choice and competition in the home loan market for the benefit of all borrowers. As mortgage broker market share has risen, lender net interest margins for new lending have fallen by 0.52% in the past five years, saving a home buyer on an average mortgage $2,600 per annum.
Because of their importance in the home loan market, our members are well placed to provide insights to this inquiry.
Our members recognise that the Australian regulatory framework, with its focus on responsible lending and the mortgage broker best interests duty, plays a vital role in safeguarding consumers. It is within that framework that our members see a range of opportunities for policy and regulatory enhancements to responsibly improve access to home ownership, particularly for first home buyers.
This includes:
- a review of APRA standards, specifically the serviceability buffer and capital risk weights. to allow for flexibility in lending assessments
- simplifying government schemes
- supporting financial literacy programs
- addressing state taxes and
- promoting innovation in the financial sector.
Thank you for your time. We are pleased to respond to questions from the Committee.
