How Brokers Dominate Australia in 10 Years

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:

• Complex lending landscape (stricter lending rules) favors broker expertise.

  
  

• First-home buyers & refinancers rely on brokers for guidance.

  
  

• Broker tech improvements (AI, Open Banking, CRM tools) enhance efficiency.

But Banks Will Keep Competing Via:

• Cheaper digital products (cutting out broker middlemen).

  
  

• Loyalty programs & bundled banking.

Final Takeaway

Brokers currently hold the upper hand, but banks are innovating aggressively. The future will hinge on:

• Brokers leveraging tech & customer trust

  
  

• Banks improving digital experiences & retention

  
  

• Regulatory changes (e.g., commission structures, Open Banking impact)