Already a subscriber?The role of mortgage brokers in crippling banks’ profit margins is grossly overstated, and brokers offer “reasonable” returns for the share of home lending they deliver.
“With excess returns rationally competed away in the home loan market the retail bank narrative moves once again to the role of brokers,” Mr Wilson said.Commonwealth Bank this week was the latest example, launching a direct-to-consumer digital mortgage product with a cheaper advertised interest rate than in either its branch network or broker offerings. CBA’s move came just weeks afteradmitted two-thirds of its home lending was unprofitable due to broker commissions.
He said the investment in and reliance on brokers was worthwhile for ING, which does not have a physical branch presence in Australia. “For us, it is a question for customer sentiment, customer demand and customer need.” David Hyman, the chief executive of Aussie Home Loans owner Lendi, said it was feasible the use of mortgage brokers would rise further, given in other markets like the UK the industry was writing 80 per cent of new home loans.
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Source: FinancialReview - 🏆 2. / 90 Read more »