Morrison Backs Mortgage Brokers

PM Backs Mortgage Brokers & their role in the Economy

The Prime Minister Scott Morrison has shown his support at the National Press Club last week when asked about whether he supports the recommendation for cutting commissions and allowing the banks to profit further off each loan as put forward by Commissioner Hayne in his final report which was released earlier this month. He has shown his support by backing mortgage brokers as they provide a better deal for home owners and investors whilst also providing healthy competition against the banks.

Prime Minister, Scott Morrison mentioned:

“ These are tens of thousands of small and family businesses that help mums and dads get a good deal on their mortgage so they don’t have to just face the banks themselves.

“It’s a pretty important service. We want to make sure that Australians still have access to that service’  he said.

Labour Minister Bill Shorten has this week backed away from his initial support for the crackdown on mortgage brokers as recommended by the banking Royal Commission, and has prepared compromise options to spare the borrower paying upfront fees. With huge support from the public for mortgage brokers to remain competitive in the industry Labour couldn’t afford to offside borrows and lenders months before a Federal Election is announced.

Mortgage brokers in 2018 wrote over 60% of loans compared to the major fours banks. With the current housing market dropping over 10-15% since last year and tighter lending could have a negative effect on the housing economy as predicted by economist’s.

The struggling market conditions were proven today’s by Westpac chief economist Bill Evans who said he expected 25 point cuts in both August and November in 2019, taking the cash rate to 1% which is a decade all time low. This will hopefully have a flow on effect to the current interest rates to encourage more lenders into the market.

If you would like to discuss these changes or if you have questions relating to your home loan contact our team on (02) 9897 1039.