Why banks want borrowers to skip the broker and go direct
Several major banks are offering better deals for borrowers who apply directly online.
Around 75% of new home loans in Australia start with a mortgage broker. Many Australians, especially first home buyers, turn to an expert when settlement is approaching and they need a loan approved fast.
But many banks are now trying to attract customers directly with online loans and low rates.
3 of Australia's Big Four banks now offer their lowest home loan rate exclusively online. This includes Commbank's Digi Home Loan.
These are rates you can't typically get through a mortgage broker.
If borrowers go direct to a lender, the lender could save thousands of dollars in broker commissions.
Finder analysis suggests borrowers could also save over $3,000 with one of these lower rate online loans.
"Banks have invested heavily in digital technologies, creating online platforms with less touch points in the assessment process," says mortgage expert Nick Chong.
"This digital shift reduces reliance on brokers by making direct access to banking services easier and more attractive to tech-savvy customers."
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Lenders like Tiimely, Athena and Unloan (backed by the Commonwealth Bank) are entirely online and boast fast approval times.
Many of these lenders don't work with mortgage brokers at all.
When Tiimely launched in 2017 they boasted of an instant home loan. But this speed and convenience comes with some disclaimers.
"When everything fits neatly into a lender's lending standards, automated systems can process loan applications quickly," says Chong.
Some lenders can process applications in hours or minutes, versus days and weeks. But this fast digital approach can falter pretty quickly for many borrowers."
Most borrowers' lending needs are not so straightforward, like a serial investor with multiple properties, self-employed borrowers, LMI Waiver requirements, trust lending."
"Experienced mortgage brokers are able to navigate these complexities on behalf of the borrower."
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