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Do Australians prefer banks to brokers?

Do Australians prefer banks to brokers?

With sweeping changes to mortgage broker remuneration on the table in the wake of the recent banking royal commission, new figures indicate that Australian mortgage holders may be more satisfied with their experience when applying for a mortgage directly through a bank branch.

According to the Roy Morgan Single Source Survey, home loan customers who obtained their loan in person at a bank branch enjoyed a 77.2% satisfaction rating, compared to 75.1% satisfaction for those who used a mortgage broker. Even when looking solely at recent home loans from the past 6 years, satisfaction with going to a branch to obtain the loan was 79.8% compared to 77.7% for mortgage brokers.

However, outpacing both brokers and branches was mobile bank representatives. Mortgage holders who obtained their home loan by meeting in person with a mobile bank representative enjoyed a satisfaction rate of 80.6%, according to Roy Morgan.

Which banks get more satisfaction from brokers over branches?

While the survey found that on average, mortgage holders enjoy greater overall satisfaction from dealing with mobile bank representatives and branches compared to dealing with brokers, it also found that customers were more satisfied with brokers than branches when applying for home loans from selected lenders, including St.George, Bankwest and NAB.

Home loan customer satisfaction

BankHome loan through branchHome loan through mortgage broker
Bendigo Bank89.6%N/A
St.George79.6%83.9%
Suncorp Bank79.1%72.6%
ANZ76.5%67.3%
Bankwest76.3%81.0%
Westpac72.0%65.8%
CBA71.4%67.1%
NAB70.8%71.7%

Roy Morgan industry communication director, Norman Morris, said:

“Although mortgage brokers have had a number of negative issues highlighted by the Royal Commission, there is a large variation in their satisfaction across the major banks and as a result there will be lessons to be learnt by understanding the better performers.”

Are brokers or branches more popular?

While mobile bank representatives enjoyed higher satisfaction scores in the Roy Morgan survey compared to branches and brokers, these representatives were found to be responsible for signing a relatively small fraction of Australia’s home loans.

The survey found that over half (53.1%) of all current mortgages were obtained in person at a bank branch, while approximately one third (33.4%) were purchased through a mortgage broker, and just 8.1% were obtained in person with a mobile bank representative.

Method used to obtain loanPercentage
In person at a branch53.1%
Mortgage broker33.4%
In person with a mobile bank representative8.1%
Over the phone3.1%
Other2.3%

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This article was reviewed by Property & Personal Finance Writer Nick Bendel before it was published as part of RateCity's Fact Check process.

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