Mortgage brokers settled $139 billion in new home loans during the June quarter, claiming 82% of all residential lending. That’s up from 81% three months earlier and 78% a year ago, according to industry research commissioned by the sector’s main trade body.
The number matters because it arrived during a quarter when major banks were simultaneously cutting fixed rates, advertising direct channels heavily, and hiring proprietary lenders at scale. One major added 270 bankers to its direct lending arm in the past financial year. Another lifted its direct share to 50% of its own originations, and publicly noted that broker loans are 20-30% less profitable than proprietary flow.
Yet broker share kept climbing. The question is whether that’s a service gap banks can’t close, or a structural handover they’ve already lost the capacity to reverse.
The service gap or the structural lock-in
Brokers now facilitate four in five home loans. Australia sits alongside the UK and Netherlands as the only markets globally where intermediaries command that kind of share. In most developed mortgage markets, brokers handle between 30% and 60%.
Two explanations compete. First: brokers deliver materially better outcomes in a complex rate environment, and borrowers have learned that lesson. Second: banks ceded the customer relationship years ago when they pivoted to manufacturer models, and now lack the distribution muscle to compete even when their direct pricing is sharp.
The data supports both. Brokers give borrowers access to 30-50 lenders versus the single product suite a bank’s direct channel offers. That range matters more now than it did three years ago, because the gap between best and fourth-best serviceability calculations has widened as lenders apply different buffers, living expense benchmarks and debt-to-income overlays.
At the same time, banks that tried to rebuild direct distribution over the past 18 months have struggled to move the needle. Hiring 270 lenders sounds material until you compare it to the 18,000-plus brokers operating nationally. One bank lifted its direct share from 32% to 34% of its own book across six months, meaningful internally, invisible in the market aggregate.
What brokers do that direct channels can’t replicate at scale
A broker’s value isn’t rate comparison. Borrowers can pull rate tables themselves. The work happens in three less visible places:
- Serviceability pre-screening: brokers model a borrower’s application against 8-12 lenders’ calculators before lodging, filtering out declines that waste time and leave credit file footprints. Banks’ direct teams assess against their own policy only.
- Policy navigation: lenders’ published criteria miss dozens of edge cases, how one treats commission income, another scores rental offsets, a third prices complex security. Brokers know which lender will say yes to a borrower a bank’s direct channel would auto-decline.
- Post-settlement leverage: brokers retain the client relationship and use the threat of refinance to negotiate retention rates without the borrower needing to move. A direct-channel customer has to lodge a new application elsewhere to access that leverage.
That third point explains why broker loans are less profitable for banks: the customer can exit more easily, so the bank can’t price in the same multi-year margin fade. The service gap and the structural lock-in are the same phenomenon.
The catch
Broker market share at 82% is either near an equilibrium or near a regulatory threshold, depending on how you read the next 24 months.
If share keeps climbing toward 85-90%, three scenarios become more likely. First: banks exit direct lending entirely and operate as manufacturers, which would drop mortgage product innovation and service quality as competition moves fully upstream. Second: regulators start asking competition questions, particularly if aggregator ownership concentration tightens further. Third: the model imports offshore structural separation rules, brokers can’t hold equity in lenders, lenders can’t own aggregators, which would fragment distribution and raise borrower costs during the transition.
If share plateaus here, the equilibrium holds: brokers own the complex/contested segment, banks keep the simple/loyal direct flow, and the split reflects actual value-add rather than market failure.
The risk variable is how the next credit tightening plays out. If regulators tighten serviceability or debt-to-income caps, broker expertise matters more and share could spike to 85%+. If banks cut direct rates sharply to defend volume, and borrowers prove more price-sensitive than service-sensitive, share could drift back toward 75%. Neither has happened yet.
Key numbers
- Mortgage broker market share hit 81.6% in Q2 2026, up from 77.6% a year earlier
- Brokers settled $139 billion in new home loans during the quarter, up $17.5 billion year-on-year
- One major bank grew direct lending to 50.9% of its own originations but couldn’t move the market aggregate
- Australia is one of only three countries where brokers facilitate over 80% of mortgages
- Broker-originated loans are 20-30% less profitable for banks than direct flow, per one major’s internal reporting
For borrowers making decisions in the next six months
If you’re refinancing or buying, the 82% statistic tells you where leverage sits. Brokers can play 8-12 lenders against each other on rate, fees and features. A bank’s direct channel can offer you its own best rate, but you’re negotiating with one counterparty who knows you have to do the legwork to get a competing offer.
The trade-off: brokers add a service layer but also a commission layer, which shows up in slightly higher rates on some products at some lenders. The embedded cost is typically 10-15 basis points over the life of the loan. You’re paying for distribution and advice. Whether that’s worth it depends on how complex your serviceability is and whether you’d otherwise make a suboptimal lender choice.
Red flags: if a broker only quotes two or three lenders, you’re not getting the panel access you’re paying for. If they push a specific product without explaining the trade-offs, you’re getting sold to rather than advised. If they can’t explain how a lender scores your income or debt, find a different broker.
Next step: if you’re using a broker, ask them to show you the serviceability output for at least four lenders, including one non-major. If you’re going direct to a bank, model your scenario through at least two brokers’ preliminary assessments to confirm you’re not leaving 40-60 basis points on the table. The market’s moved far enough that the default path, sticking with your existing bank, is now the highest-risk option for most borrowers.
Broker market share dynamics and what they mean for borrowers are covered in more detail here, including how aggregator scale is shifting negotiating power upstream.
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General info, not financial advice.
