It’s safe to say it’s been a rollercoaster few years for Australia’s home buyers.
First, property prices soared to record highs as interest rates dropped to historic lows, making it harder to get on the property ladder.
Now, with prices moderating, housing affordability is improving. However, rapid interest rate rises are shrinking people’s borrowing power and making it more challenging to get approved for a home loan.
With all this change, it’s not surprising Australians have been turning in increasing numbers to expert mortgage brokers to arrange their home loans, rather than going directly to the banks.
Mortgage brokers just achieved their strongest June quarter on record, after writing more than two out of three (68%) new home loans during the three months to June, according to the latest data from research group Comparator. By comparison:
Translate this into dollars and mortgage brokers settled $96.1 billion of new loans over the June quarter – the highest value for any quarter on record, and a huge 82.0% increase when compared to the equivalent quarter in 2020.
The Mortgage & Finance Association of Australia’s incoming chief executive, Anja Pannek, said this was an incredible result for mortgage brokers, particularly given the environment of rising interest rates and a slowdown in the property market.
“It is clear from the strong growth in the proportion of home loans written by mortgage brokers over the past few years that customers value the service mortgage brokers offer,” she said.
“Market conditions like we are seeing now further highlight the benefits of using a mortgage broker who can explain the array of different lenders, products and options available to their clients.”
How do brokers benefit you?
Many home borrowers in Australia prefer to deal with a mortgage broker to arrange their home loan for three big reasons:
Let’s look at each in detail.
Brokers offer more options than a bank
Imagine you need to borrow $800,000 to buy a home. If you go to your own bank or any other lender directly, they will only offer you options from their own range of products.
These options may not be the most competitive on the market or the most suitable for your circumstances – and the only way to tell for sure is to compare other home loan deals from across the market.
This can be incredibly time-consuming if you do it yourself, not to say stressful.
But the good news is you don’t have to shop around when you use a mortgage broker. That’s because most brokers have access to deals from dozens of different lenders, including the big four banks, challenger banks, credit unions and non-bank lenders. As a result, they can compare loans on your behalf to find a loan that truly suits your unique circumstances and goals.
Brokers work in your best interests
Since January 2021, mortgage brokers must always act in their client’s best interests when providing credit assistance. This is known as the Best Interests Duty and is a statutory obligation, so you can always be confident you are receiving the best advice.
But while mortgage brokers are legally obliged to always act in your best interests, this law does not apply to banks or non-bank lenders.
Brokers are home loan experts
Finding the right home loan to suit your unique needs can be challenging, particularly when you’re doing it for the first time.
Mortgage brokers can hold your hand throughout the whole process, providing expert guidance and advice and crunching all the numbers. A good broker will help you weigh up all your options so you can be confident you’re getting the best deal for your particular situation.
Looking for a home loan? Shore Financial can help. To discuss your options, you can call us on 1300 416 700, email us on info@shorefinancial.come.au or fill in this online form.