Mortgage brokers settle record $165.96 billion in home loans, says MFAA

MFAA figures show 410,000 applications lodged

Mortgage brokers settle record $165.96 billion in home loans, says MFAA

Mortgage brokers have lodged more home loan applications and settled the highest value of loans ever, according to the MFAA’s latest Industry Intelligence Service Report.

The 13th edition of the IIS, covering the six-month period from 1 April 2021 to 30 September 2021, reveals the total number of home loan applications lodged had surpassed 400,000 for the first time, with more than 410,000 applications lodged.

Reflecting a buoyant property market and the popularity of the broker channel, brokers settled $165.96 billion in residential home loans, up 54% year on year. This is the highest value recorded for any six-month period since MFAA began reporting in 2015.

Mortgage brokers were involved in the majority of home loans for the period. In the September 2021 quarter they facilitated more than two in three of all new residential mortgages, recording the highest ever market share across any quarter at 66.9%.

The report also revealed the average number of applications lodged per active broker rose from 21.4 to 23.6, while the national average value of home loans settled per broker reached $9.1 million, the highest value since IIS records began.  Year-on-year, the number of home loan applications increased by 22.89% overall.

The aggregate value of brokers’ home loan books grew by 15.9% year-on-year, to $853.9 billion. All states (except the Northern Territory which remained flat), experienced double digit growth in their total loan books. Victoria and NSW led the way, rising 18.6% and 16.2% respectively year-on-year.

The MFAA’s report draws on data supplied by 11 of the industry’s leading aggregator brands.

“The April to September 2021 period was, like much of the past two years, marked by significant disruption with lockdowns in many states, particularly the eastern states,” said MFAA CEO Mike Felton (pictured).

“Brokers have continued to show that they are here to support customers seamlessly throughout these periods of disruption and changes in business practices. This research shows consumers recognise, and appreciate, this continuity of service.

“This was also the first full reporting period brokers were operating under the full suite of reforms implemented over the past two years, including the unrivalled Best Interests Duty, giving consumers even greater trust and confidence in the broker channel.”

During the six months to September, the number of brokers in Australia peaked at 18,285.

“This marks the third consecutive six-month period of growth, with an additional 1,317 brokers compared to the previous six months and exceeds the previous record of 17,040 brokers in September 2018,” Felton said.

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Broker commissions increased, with gross annual earnings up 23.9% year-on-year to $188,046. Up-front commissions rose 39.21% to an average of $117,992, while trail commissions increased 3.3% to $70,054.

The number of mortgage brokers also writing commercial loans grew, rising from 4,539 in the corresponding period in 2020 to 5,266 in 2021. The value of commercial lending also reached record IIS levels at $13.4 billion.

“More mortgage brokers than ever are now also writing commercial lines,” said Felton.

“This indicates brokers are diversifying their business and assisting their customers with a wider range of their financing needs.”

Felton said disappointingly, the report showed that the proportion of female brokers had dropped slightly from an already low base.

In the latest six-month period the percentage of female brokers had fallen to 25.6%, the lowest proportion yet, but 40 more female brokers had joined the industry in the six months to September 2021, bringing the total to 3,249.

“While the number of female brokers increased slightly during the period, the proportion of female brokers in the overall broker population has not seen the same increase indicating that there is clearly a lot more work to be done to increase female participation in our industry,” said Felton.

Overall, Felton said the six months to September 2021 had been a positive time for the mortgage broking industry.

“Market share benefitted from reforms implemented and brokers continued to respond to consumer demand driven by record low interest rates, a shortage of supply and government support programs combined with higher household savings and the normalisation of remote work.”