Mortgage seekers avoid banks

Over 50 per cent of new home buyers no longer want to deal directly with banks for their home loans and are turning to mortgage brokers, according to research by Global Reviews.

The research revealed that 57 per cent of people preferred a broker because they could get a comparison of different mortgages without spending time doing research and brokers were perceived as being more focused on consumer needs.

The research also showed that only 15 per cent of respondents felt banks understood their mortgage needs, whilst 33 per cent said brokers understood their needs, which is almost double.

Global Reviews director Barbara Kallis said the popularity of brokers could be traced back to the competitive nature of the mortgage market, where finding the best product can be difficult and time-consuming, and the type of interaction brokers provide.

“When a customer visits a mortgage broker they feel a sense of understanding, the right questions are often asked by the broker, who then makes a specific recommendation. Our research has found this needs-based experience is often missing in bank branches,” Kallis said.

Despite the results showing strong favour towards brokers, two-thirds of respondents still said they had taken a mortgage out with their bank because of an existing relationship.

The research also found that the Internet has become a vital tool in researching and selecting a mortgage, with 65 per cent of people saying they used the Internet at some point while looking for a mortgage.