Major Banks Rethink Mortgage Strategies Amid Profit Margin Squeeze

Currently, mortgage brokers facilitate nearly 80% of new home loans in Australia, a significant increase from about 50% six years ago. However, banks are now prioritizing in-house mortgage origination channels, which are reported to yield 20-30% higher returns compared to broker-originated loans. By focusing on proprietary channels, banks can avoid broker commissions and foster deeper customer relationships.

For consumers, this transition may lead to changes in the mortgage application process. While brokers have traditionally offered a broad comparison of loan products, direct engagement with banks might provide more tailored offerings. Prospective borrowers should assess the benefits of both channels to determine the most advantageous approach for their individual financial situations.