August 12, 2015
Mortgage broker market share will continue to grow as the home loan environment becomes increasingly complex, Mortgage Choice head John Flavell has said.
According to the brokerage's chief executive officer, the recent home loan pricing and policy changes being made by Australia's lenders are making the home loan environment more complex than ever before.
“Ever since the Australian Prudential Regulation Authority mandated in December last year that investment lending growth should not exceed 10% for Australia's lenders, we have seen a number of banks make some sweeping changes to their policy and pricing in a bid to curb their level of investment lending growth,” he said.
“These changes, which include modifications to servicing criteria, loan to value ratio restrictions and interest rate increases across select home loan products, have made the home loan market more confusing and complex.
“As a result, buyers increasingly need expert advice to help them navigate the home loan maze and find the right product for their needs – which is where mortgage brokers come in.
“Mortgage brokers not only have access to hundreds of home loan products from a variety of lenders, but they have the expertise, knowledge and ability to help property buyers find the right home loan product. Further, they can explain to borrowers exactly what the recent changes mean for them and their bottom line.”
Mr Flavell said given that the changes are making the home loan market more complex for potential buyers, he wouldn't be surprised to see a lift in the number of borrowers seeking out the expert advice of a mortgage broker and, in turn, a lift in broker market share.
“Regardless of recent comments made by Westpac's Brian Hartzer, the fact is mortgage brokers are licensed professionals who are well placed to help potential borrowers with their mortgage needs,” he said.
Earlier this week, Mr Hartzer was reported to have said mortgage brokers were likely to come under the ire of financial regulators in the same way that financial advisers had, and questioned brokers' sales practices and ability to recommend mortgage products.
Mr Flavell said this view is outdated.
“The reality is that the mortgage broking industry has gone through significant change over the years with the introduction of National Consumer Credit Protection legislation. All brokers have a very clear obligation to ensure that customers can service their debt without substantial hardship,” he said.
“Today, brokers are well educated, mortgage professionals who are well placed to deliver customers with sound home loan advice, guidance and importantly choice.”
If you would like learn more about your home loan or financial advice options, call 13 77 62.