How Brokers Dominate Australia in 10 Years

Apr 4, 2025

2 min read

Australia's mortgage broking industry has experienced remarkable market share growth over the past decade. According to March 2025 data from MFAA (Mortgage & Finance Association of Australia), brokers now facilitate 76% of all home loans - a significant increase from approximately 50% in 2015. This shift reflects evolving consumer preferences, regulatory impacts, and the competitive dynamics between brokers and banks.

Here’s a deeper look at the key factors driving this trend and what it means for the industry:

1. Why Brokers Are Gaining Market Share

A. Consumer Trust & Convenience

One-stop-shop service: Brokers compare hundreds of loans (not just one bank’s products).
Personalised advice: Especially valuable for complex cases (self-employed, investors, credit-impaired borrowers).
Digital adoption: Online platforms make it easier than dealing with bank branches.

B. Banks’ Declining Direct Channels

Branch closures: Major banks (CBA, Westpac, NAB, ANZ) have shut hundreds of branches, pushing customers to brokers.
Poor customer service: Long wait times & rigid policies at banks drive borrowers to brokers for faster solutions.

C. Regulatory & Commission Structures Favoring Brokers

Best Interests Duty (BID): Reinforces broker credibility vs. bank sales-driven models.
Trail commissions: Incentivise brokers to maintain long-term client relationships (banks struggle to retain customers).

2. How Banks Are Fighting Back

Despite broker dominance, banks are not giving up and are deploying strategies to regain market share:

A. Aggressive Retention Strategies

Lower retention team rates (offering discounts only when customers threaten to leave).
Cashback offers (sometimes may offer cashback to retain clients).

B. Digital Mortgage Platforms

CBA’s "Unloan" (fully digital, no-frills mortgage), NAB’s "Quickbiz" (fast online approvals for SMEs) etc.

C. Broker Channel Control

Some banks reduce broker commissions with some techniques.
In-house "broker-like" teams (hybrid models where bank staff act as pseudo-brokers).

3. Key Challenges for Brokers

While brokers dominate, they face rising threats:

Bank-owned broker arms (e.g., Aussie owned by CBA, RAMS by Westpac) creating conflicts.
Regulatory risks: Future commission cuts (like UK’s ban on trail commissions).
Fintech disruption: Digital lenders (e.g., Athena, Tic:Toc) bypassing brokers.

4.Future Outlook: Will Brokers Keep Winning?

Brokers Likely to Maintain Dominance Because: