In addition to the 1,000 survey respondents who had taken out a home loan in the two years to September 2016, the study, commissioned by the Mortgage and Finance Association of Australia, also conducted qualitative research. Three customer focus groups with between 7 and 11 participants in each group related their experiences of the home loan process.
The study found that overall, home loan customers who dealt with a mortgage broker were more satisfied than those home loan customers who dealt directly with their lender.
Key findings of the survey
Some of the key findings from the survey included:
- Borrowers who went through a mortgage broker were more satisfied with their experience than those who dealt directly with the lender. Around 32% of mortgage broker customers rated their experience of using a broker as 9 or 10 out of 10 (with 10 being ‘exceeding expectations’). This compares to 20% of customers who dealt directly with their lender giving a 9 or 10 out of 10 ranking to their lender.
- While overall 82% of mortgage broker customers and 73% of direct to lender customers agreed that the broker or lender generally acted in the customer’s best interests, the degree of confidence was higher for mortgage broker customers.Some 40% of mortgage broker customers felt the broker acted in their best interests at all times. For those customers dealing directly with a lender, only 22% felt the lender acted in their best interests at all times.
- Customers who used a mortgage broker felt they were kept better informed. Fifty percent of mortgage broker customers said they were being informed at all times, while 39% of customers who dealt directly with their lender said their lender kept them informed at all times.
Feedback from the focus groups
The study’s focus groups reinforced the positive experience of dealing with a mortgage broker as revealed in the survey.
On the question of “Why did you decide to use your broker or lender?” the study noted that:
“A number of participants expressed the view that it was simpler and easier to go through a broker as they perceived that brokers received special treatment from financial institutions and could get things done faster than a banker in a branch.”
“Many also felt it was more efficient through a broker as they felt that a broker will know which banks are likely to approve their specific loan application circumstances.”
On the question of “How satisfied were you with the service you received?” the study noted that:
“Brokers were valued for the perceived ‘value-added’ services of being a ‘go-to’ for advice during and after the process. Additionally, they were valued for their ability to shop around a variety of lenders, and the value of their up to-date knowledge of the markets and product options.”
How one broker helped family save $200pm … from their existing bank
Melbourne’s Herald Sun illustrated the value a mortgage broker can provide in an article published on 18 November 2016 titled: Why you should never give up on mortgage discounts.
That article highlighted the case of Valay Shah who had unsuccessfully requested a lower interest rate from his bank.
After his request for a lower interest rate on his home loan was denied by his own bank, he headed online and found a mortgage broker who negotiated a $200 monthly saving — from the same bank that rejected him first time.
“The extra savings on my home loan means a lot for me and my family,” says Mr Shah, whose home loan interest rate was cut from 4.54% to 4.09%.
“Some of that additional money I am putting back into my home loan so I can pay off the loan sooner, and the rest goes into a savings account for my son’s higher education.”
TV personality and chairman of financial services company Yellow Brick Road, Mark Bouris, explained the value of a mortgage broker in an opinion piece he penned for The Sydney Morning Herald on 21 August 2016.
“When you use a broker you save time and energy, and you are more likely to find a mortgage not only at the lowest cost but with the best features for you.
“Most brokers not only have professional networks and industry expertise to draw on, they also have software platforms that give them detailed access to a much greater variety of home loan than the average consumer can access.”
Interest rates on the way back up
Last Friday, 25 November, NAB-owned UBank increased its standard variable rates for owner-occupiers and investors by 10 basis points.
The move comes on the heels of ME Bank earlier in the week announcing increases of up to 15 basis points across its variable and fixed-rate home loans.
And Westpac and its related banks including St. George are raising fixed rates by 24 to 60 basis points over 2, 3 and 5 years for investors and owner-occupiers.
With interest rates back on the rise, now is an ideal time to contact a mortgage broker.