Top 10 mortgage brokers snare the lion’s share
Australia's mortgage broking market is the fastest growing distribution channel for home lending institutions, new figures from Market Intelligence Strategy Centre show. The top 10 mortgage brokers comprised 55 per cent of the brokered loan market in the March quarter, up from 47 per cent the previous year. The top 10 group includes Mortgage Choice, Choice Home Loans and the Suncorp-owned LJ Hooker. Estimates of brokers' share of the total market vary but they claim that at least one in every five loans is sourced via brokers. In Western Australia, the figure is closer to 50 per cent. There are around 2,000 mortgage brokers in Australia, with those rated as “active” rising to 623 from 482 a year ago. The increased concentration of brokers indicates that some are only “occasional loan introducers”, MISC said.
The major banks captured 60 per cent of all brokered loans in the quarter, a fall of 3 per cent from March 2001, with the slack being taken up by regional banks and non-banks. Even though this fall in market share appears slight, each percentage point movement now equates to $290 million worth of loans.
Banks are moving away from their traditional reliance on branches, which represent a fixed cost, and even mobile lending teams, to the variable costs of brokers, with banks paying the brokers commissions for each loan secured on their behalves.