Some important statistics were released today which show how Australians could benefit from using brokers.
The Australian Prudential Regulatory Authority (APRA) produced figures showing that, while total housing lending from the lenders for which it is responsible was $1.7 trillion, $1.43 trillion of this was lent by the major lenders. This equates to 84 per cent of the market!
Put it another way, only 16 per cent of this lending was by credit unions and building societies.
These figures probably underplay the role that brokers play as brokers can:
- Arrange loans with major banks
- Arrange loans with credit unions and building societies
- Access a wide array of lenders who are not included in APRA’s figures such as Liberty, Mortgage Mart and Pepper.
But these figures do also imply that most home owners could arrange some sort of housing finance by walking into a bank branch. Of course, I would argue that a client financed with a major lender through a broker would be better set-up than if they just went to their local branch.
This is where brokers play a key role, they ‘keep the bastards honest’ to steal an old catchphrase. Without brokers, the Big Four could do what they want to clients and make a massive profit out of them.
Only today, AMP came out with a variable rate of 4.09 per cent. AMP only offers home loans through brokers. So to take advantage of this ultra-competitive rate, clients need to call their broker. Similarly another lender which does not have a branch network is offering property investors 4.13 per cent.
‘Keeping the bastards honest’ was the catch-cry of the Australian Democrats who are now dead as a dodo. Let’s hope that mortgage brokers continue to play a key role in housing finance so that the major banks are kept honest.