The Mortgage and Finance Association of Australia (MFAA) has criticised claims by Choice consumer group that consumers who bypass mortgage brokers for loans can save money. Choice also claimed that brokers are focused on commissions rather than getting the best for the clients.
Phil Naylor, the chief executive of the MFAA, said: “Choice has failed to acknowledge that there are other important factors in selecting a loan, beyond the interest rate offered. Brokers are experts in assessing the different features of a loan, including the interest rate, exit fees, services offered and loan structure.”
A survey undertaken by Choice, which drew on the experiences of three borrowers, said that the best savings on home loans can be achieved by switching to a credit union or online subsidiary of a major bank. The survey said neither of those loans are available through mortgage brokers.
“The survey also undersells the important role that brokers can play in helping consumers navigate the often complex and confusing home loan market,” Naylor said.
“A report like the one undertaken by Choice, covering the experiences of three consumers is anecdotal feedback, but can hardly be defined as empirical research,” he added.
The MFAA and BankWest’s own commissioned research showed that consumers are consistently more satisfied using mortgage brokers rather than dealing direct with a lender for a loan. They drew on a pool of 802 online correspondents.
The MFAA/BankWest Home Finance Index found that 75 per cent of consumers use brokers to source home loans options because they do all the legwork, while 72 per cent said that brokers have a wider loan range. Seventy-one per cent said brokers were experts in a range of mortgages from numerous lenders.
“It’s clear from our research that the criticism brokers often receive for not being compelled to source the right loan from individuals is overplayed and exaggerated. Other parts of our research clearly show that borrowers with a broker-facilitated loan are less likely to struggle with repayments than those who directly dealt with a bank,” Naylor said.
