Decade of hard graft pays off as Australian brokers claim nearly 82% of all new mortgage lending - but is there more gas left in the tank
Back in 2023, Blake Buchanan (pictured, left), general manager of Specialist Finance Group (SFG), told MPA that brokers reaching 80% of new home lending was realistic within five years – with a few caveats.
Self-service loans were blowing up in the US, and Australia was slowly but surely following suit. It would take a broking industry that could match the speed of online rate comparison with expert guidance and validation layered on top.
Buchanan missed his own forecast by a considerable margin: it only took three years, not five. Earlier this year, the Australian broking industry became one of only a few globally – alongside the UK and the Netherlands – to smash the 80% barrier.
There was evidently more in the tank. New data released by Cotality and the Mortgage and Finance Association of Australia (MFAA) shows brokers facilitated 81.6% of new residential mortgages in the June quarter – the highest share on record.
Brokers wrote $139 billion in new home lending during the quarter, a year-on-year increase of $17.49 billion and the largest volume ever recorded for a June quarter.
Over the eight years the MFAA has tracked the metric, broker market share has climbed from 53.9% in June 2018 to 81.6% today – a rise of 27.7 percentage points.
While the scale of the shift still surprises some, Them Lam (pictured, right), chief distribution and marketing officer at Australian Finance Group (AFG), sees it as the payoff from a decade of hard graft.
"Ten years ago, we knew, and fought hard, to ensure the broker channel would continue to provide the distribution channel that borrowers want and lenders need.
“To have grown from around 50% to 81.6% in ten years reflects the value brokers continue to provide borrowers through greater choice, competition, and support in navigating an increasingly complex lending market."
Pete Lirantzis (pictured, below), chief executive officer of Resimac, says the milestone would have seemed far-fetched even a decade ago.
"The shift has been remarkable. It shows how much borrowers value choice, expert advice and personalised support. More than ever, they want a broker who has their best interests at heart, understands their needs and can guide them to the right solution.
"In my 20 years in the industry, I've seen brokers go from strength to strength. This result reflects a clear shift in how customers prefer to access finance and reinforces why we continue to invest in the channel. Brokers provide trusted advice, and that trust is a key driver of the channel's ongoing growth."
Why alternative lenders need the broker channel
The record share also underscores how central brokers have become to non-bank and specialist lenders, who rely on the channel to reach borrowers outside the major banks' branch networks.
Tony MacRae (pictured, centre), chief commercial officer at Bluestone, says the broker channel is foundational to how his business operates.
"Brokers are at the heart of Bluestone's business. We distribute exclusively through the broker channel, so their success is our success. Our focus is simple: build strong relationships, deliver exceptional service, and provide brokers with flexible lending solutions that help more customers achieve their property goals."
MacRae argues the relationship works both ways for borrowers, too. "The broker channel is incredibly important for alternative lenders because it gives them a genuine opportunity to compete for borrowers, particularly those without a branch network.
"Brokers can look beyond the major banks and connect customers with a much broader range of lending options that may better suit their unique needs. This keeps prices competitive for all Australian borrowers."
Lirantzis agreed. "The broker channel is critical to Resimac. Brokers and their customers play a primary role in Resimac's future growth. Our success is directly intertwined with theirs, which is why enhancing the broker experience remains a top priority for us.
"We want brokers to see Resimac as a lender that helps them build their business and meet the needs of their customers in the most efficient way. Their insights shape our products, improve customer support and keep us responsive to the market. Strong broker relationships and a positive experience are essential to being a lender of choice."
Is there more market share to win?
Lam, who this year stepped into the newly created chief distribution and marketing officer role covering distribution, marketing and product across AFG and its subsidiary Fintelligence, doesn't see a ceiling.
"If anything, the more lenders, products and pricing options borrowers have to wade through, the stronger the broker proposition becomes to provide guidance," he says.
MacRae agrees there's further to go. "Australians have and will always value choice and great service, both of which brokers continue to deliver in spades. With access to a range of solution-based lenders that say yes more often, there is no reason why brokers can't continue to grow their share.
“As customer needs become more diverse, the value of broker advice and access becomes even more important. Bluestone believes that great relationships and excellent service coupled with innovative solutions for non-standard customers is a winning formula, and it's great to see brokers delivering this to more and more customers."
Lirantzis sees room for the channel to keep growing, even from such a high base. "While broker market share is already at historic highs, the long-term trend remains strong. The latest data shows the channel continues to gain relevance with borrowers, and there is still room for growth as more customers seek expert guidance and choice.
"Brokers have a deep understanding of both lending products and their customers' needs. That combination is powerful. Year after year, brokers have continued to lift the standard of service and advice they provide, and that discipline is what gives the channel further opportunity to grow."
Buchanan, too, reckons there's more in the tank – but he's not taking it for granted. "Brokers will continue to dominate all forms of lending as the most trusted advisers. We open the doors to lenders that consumers simply would not know about. This access to competition through the broker keeps interest rates, policies and fees in check as they are all vying for the business."
Perhaps there's another 5–10% left to claim. But as Buchanan first said back in 2023: "It's ours to lose if we do not improve some features of our service."
