Transformation of 2026 Lending Market

As 2025 draws to a close, it marks not just the passage of time but the end of a structural era for Australia's credit market. We are witnessing a profound migration of power—from a centralized banking system towards specialized, decentralized advisory networks. This is not a cyclical fluctuation but a fundamental restructuring of the financial intermediation model. The combined weight of regulation, economic gravity, and the vector of client trust is pushing mortgage brokers to the centre of the future credit ecosystem.

This article will analyse the underlying logic of this transformation and argue why 2026 will be the pivotal year brokers evolve from "market participants" to "rule-definers." As traditional banks contract under compliance pressures and the broker channel commands nearly 80% of market share, the rulebook of the lending market has been permanently rewritten.

Chapter 1: The Unravelling of the Old Order – The Contraction and Dilemma of Bank Channels

The traditional bank-dominated credit model faces a triple deconstructive pressure. The resulting instability of its foundations has created a historic window for mortgage brokers.

1. Regulatory Contraction and Risk Aversion

Ongoing APRA-driven audits have forced major banks into a "risk-minimisation" mode, leading to increasingly rigid loan approval processes. This cautionary stance is explicitly supported by the recent Reserve Bank of Australia's (RBA) Financial Stability Review. While noting overall robust lending standards, the report highlights close monitoring by regulators to prevent their erosion amidst intensified competition in business lending. Furthermore, the RBA supports APRA in maintaining stable macroprudential policy, suggesting any easing during a potential rate-cut cycle could amplify financial risks. This dual pressure from internal audits and external oversight has made bank approvals significantly more conservative.

2. Two Major Policy Shifts Reshape the Landscape

The 6x Debt-to-Income (DTI) Cap: This regulatory hard constraint has fundamentally changed borrowing logic. It is no longer simply about "affordability" but a technical challenge of maximising financial leverage efficiency within the 6x framework. Most borrowers' "natural" borrowing capacity has been systematically compressed, requiring expert planning to unlock potential.

Fixed Rate Increases Amid Economic Uncertainty: Major banks have increased fixed rates amid economic volatility and inflationary pressures. However, strategies vary greatly between institutions and over time. This has created a highly fragmented and rapidly changing interest rate matrix, making it almost impossible for individuals to track optimal rates on their own.

3. The Inherent Conflict in the Business Model

The core contradiction of bank-owned channels is that their advisors are essentially "product sellers," not "independent advisors." Their KPIs, product permissions, and profit objectives create an inherent tension with obtaining the client's optimal outcome. The decision by the Commonwealth Bank (CBA) to terminate its banker referral channel is also clear proof that this conflict is unsustainable under the "Best Interests Duty" regime. This inherent conflict will be further magnified in 2026 as consumer financial literacy rises and information becomes more transparent.

Chapter 2: The Rise of the New Ecosystem – The Formation of a Broker-Exclusive Credit Market

Data Reveals an Irreversible Trend

According to the latest quarterly report released by the Mortgage & Finance Association of Australia (MFAA) on December 8, 2025, mortgage brokers facilitated 77.3% of all new residential loans settled nationwide in the September 2025 quarter. This represents the second-highest market share on record, with the settlement value reaching a record $130.23 billion. This figure marks the broker channel's transition from an "alternative" to the indisputable mainstream and the dominant force in the market.

"Broker Exclusive Products" Become the Competitive Core

More than 40% of non-major lenders and numerous specialist credit providers (e.g., for asset finance, complex income) now distribute their most competitive core products exclusively through accredited broker networks.

The Channel-Dependent Strategy of Non-Major Banks

Over 30 active non-major banks (e.g., Macquarie Bank, ING, Bankwest) and credit unions rely heavily on broker networks for growth. These institutions provide brokers with:

Dedicated credit teams and fast-track approval channels

Case-by-case negotiation authority (e.g., for special rate approvals, policy exceptions)

Ongoing professional training and compliance support

The Broker's New Role as a "Capital Curator"

Borrowers no longer face a homogeneous "bank market" but a highly stratified and product-differentiated "credit capital market." The broker's core function has evolved from "rate comparison" to:

Capital Matching Expert: Precisely pairing a client's unique financial profile with the most suitable exclusive product.

Credit Architect: Optimising the overall financing solution within frameworks like the DTI cap, using strategies like multi-lender combinations and security structuring.

Compliance Navigator: Ensuring complex applications meet increasingly stringent audit requirements, reducing the risk of rejection.

Chapter 3: 2026 Market Forecast – Three Defining Features of the Broker-Led Era

Based on current trends, we predict the 2026 credit market will exhibit the following structural features:

1. Channel Share to Surpass the 80% Threshold

The broker channel's share of new residential loans is expected to advance from the current 77.3% towards 80%. This is not just a quantitative accumulation but a fundamental shift in bargaining power. Mainstream media and policy discussions will formally recognise the broker channel as "systemically important infrastructure."

2. The Proliferation of Specialised Niches

"One-size-fits-all" credit advice will lose its market relevance. Successful brokers will cultivate deep expertise in vertical segments, establishing specialist labels such as:

Credit Advisor for Medical Professionals

Tech Industry Equity & Credit Structuring Specialist

Cross-Border Tax Resident Asset and Debt Strategist

3. The Technology-Enabled Deep Advisor Model

Artificial intelligence and data tools will move beyond process automation to enable:

Real-Time Multi-Lender Scenario Modelling: Dynamically displaying optimal lender combinations under different DTI utilisation levels.

Long-Term Financial Stress Testing: Evaluating a single loan's resilience within the client's full lifecycle financial plan.

Automated Audit Trail Generation: Creating a digital evidence chain for every piece of advice to demonstrate compliance with the "Best Interests Duty."

Chapter 4: MoreMore Finance's Strategic Position – From Channel to Think Tank

Within this transformation, our role has undergone a triple evolution:

1. The Neutral Defender of Individual Financial Sovereignty

Our relationships with over 50 lending institutions do not constitute a simple product list. It is a carefully curated network of capital partners. We owe no sales obligation to any single institution; our sole legal duty is to defend your long-term financial health. Every recommendation is based on independent modelling and scenario analysis, ensuring it can withstand the strictest compliance scrutiny.

2. The Structural Problem-Solver for Complex Situations

Faced with the DTI cap, we offer not compromise but creative financing architecture. For example:

Unlocking borrowing capacity within policy frameworks using guarantor structures or asset restructuring.

Creating pathways for clients underserved by standard bank channels by leveraging the differentiated policies of exclusive products.

Integrating property finance into broader wealth management and tax planning strategies.

3. Your Exclusive Gateway to Hidden Opportunities

The market's most favourable credit resources often exist outside the public view. Through daily strategic dialogue with lender BDMs in exclusive channels, we gain access to unpublished special rate opportunities, flexible policy windows, and pre-launch product previews. This "market intelligence," built on deep collaboration and professional reputation, is a scarce resource unavailable through any public channel or direct application.

Conclusion: Your Choice of Partner Determines Your Future

The 2026 credit market will no longer offer "average rates" or "standard solutions." Every financing arrangement will be a personalised capital allocation, the success of which will profoundly impact wealth trajectories for the next five to ten years.

The banking system's contraction is not an active choice but the result of market efficiency and regulatory evolution. The broker channel's rise is equally no accident; it is a sophisticated outcome born from specialised division of labour, heightened client sovereignty, and growing financial complexity.

In this new era, the borrower's core question has shifted from "How much can I borrow?" to "How should I structure my debt capital to optimally support my wealth strategy at the lowest cost?" Answering this question no longer requires a salesperson, but a strategic advisor, an architect, and a capital navigator.

This is the essence of 2026: It is not the year of the bank, nor can it be simplistically labelled the year of the broker. It is the Year of Professionalism—the year advisory value is redefined and respected anew. And professionalism is the sole reason for our existence.

Let us architect your capital future together.