IS MORTGAGE BROKING A GOOD DEAL?

IBISWorld Mortgage Brokers in Australia, October 2020 report author Yin Huey Yeoh wrote of the housing sector, “Housing prices recovered slightly in 2019-20, but are expected to fall in the current year as a result of the Covid-19 pandemic. Consequently, industry revenue is projected to fall 0.6% in 2020-21.

“Residential property loan rates are anticipated to rise over the next five years, reducing investor demand for residential property. Higher competition both internally and externally will likely exert downward pressure on industry participation growth. Overall, industry revenue is projected to rise at an annualised 1.7% over the five years through 2025-26, to total $2.7 billion.”

There is a more prominent place for brokers now in the market, Yin Huey Yeoh suggests.

“Mortgage originators tend to consider brokers an efficient way to increase brand recognition in areas where they may not have a strong presence. Some smaller lenders find brokers particularly useful, as these companies may offer competitive rates and quality products but lack the brand recognition, size and marketing power required to compete against larger institutions.

“Brokers have taken up a more prominent role in the mortgage lending market over the past five years, as borrowers have sought unbiased advice when obtaining a mortgage.”