The Australian Mortgage Brokers industry is relatively new, having commenced in the early 1990s. Prior to the de-regulation of the Australian financial system in the 1980s, origination of mortgages generally occurred directly at branches of the major banks and building societies.
Industry quick facts:
- Mortgage lending origination sector mid 2016 was $344 billion for 12 months in residential lending
- Mortgage brokers as of September 2016 contribute 53.6% of all successful lending in Australia from 44.2% in March 2013
- The major banks deliver 80% of all home loan lending in Australia but brokers only refer to them in 70% of cases offering consumers access to greater choice and better credit advice
- According to aggregator data there are over 16,000 residential brokers operating in Australia
- The industry as a whole supports mandatory membership to ensure our professionals are well informed of their obligation to support positive and compliant consumer outcomes
- The industry supports its brokers achieving the 20 Continuing Professional Development (CPD points) hours annually to ensure our profession is educated on the developments in industry that impact their dealings with customers
- The profession covers every populated sector of Australia providing consumers and business owners access to suitable lending options in residential, commercial and vehicle/equipment lending
- Brokers are required under law (NCCP, national credit act 2009) to communicate to consumers how they are remuneration in a clear manner so that all parties experience a transparent view of the broker model
- Originating a mortgage through a broker is at no cost to the consumer with remuneration to the broker paid by the lender selected by the customer
Mortgage and Finance brokers are often viewed as providers of comprehensive, convenient and professional credit advice to clients. The brokers represent a panel of lenders and can offer customers a range of mortgage products matched to specific customer needs.
Buying a property is often one of the most important financial decisions an individual will make in their lifetime, and it usually requires a substantial loan. Therefore, many borrowers consult brokers (53.6%) to help them navigate the complex range of loan products available.
Mortgage brokers in Australia act primarily by aiding borrowers in sourcing and applying for mortgage finance (for both residential and investment real estate purposes), and in refinancing existing mortgages. This service includes providing suitable credit advice to assist customers make informed credit decisions. Brokers do not usually charge mortgagees any fee for their services. They receive origination and trailing remuneration directly from lenders.
The industry has a high number of participants, which contributes to its highly competitive nature. Brokers are generally required to operate under an Australian Credit Licence, hold a Certificate IV in Finance and Mortgage Broking and maintain at least 20 hours of Continuing Professional Development per annum. The majority of Brokers operate through affiliation with a larger broker group or aggregator which already holds an existing licence. The rapid growth of the Mortgage Brokers industry has led to the implementation of minimum education requirements for people who choose to enter this profession.
MFAA is committed to holding the industry's highest minimum education requirement at a diploma in Finance and Mortgage Broking. We see this education standard as a clear path to professional credit advice and ultimately greater consumer protection.