Mortgage brokers shine in slowdown

MORTGAGE brokers performed better than average during the slowdown in residential lending during 2010.

Research published yesterday by the Market Intelligence Strategy Centre (MISC) showed the domestic mortgage market contracted by 11 per cent in the six months leading up to September 2010. However, 164 broker groups wrote only 9 per cent less loans in the six months, showing that the slowdown for brokers was not as pronounced as it was across the mortgage market.

MISC said the better than expected performance showed that Australian home loan customers were increasingly prepared to use a mortgage broker to negotiate, rather than dealing with banks directly.

In the six months, the average broker loan was worth $276,715 compared to direct loans of $270,688.

“Borrowers will naturally be encouraged to embrace channels they perceive afford them more assistance and more lender choice,” MISC said.

The contraction in the wider mortgage market of nearly 19 per cent was attributed to three interest rate rises and the federal government winding back its first-home ownership grant scheme, which had been introduced during the global financial crisis.

Figures from the Australian Bureau of Statistics published yesterday showed the value of new home loans rose by 2.9 per cent during November, despite an interest rate rise that month.

Date: 13 January 2011 | For the full report, please visit http://www.theaustralian.com.au