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Major Banks Rethink Mortgage Strategies Amid Profit Margin Squeeze
Understanding the Implications of Banks' Shift from Mortgage Brokers
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Australia's leading banks-Commonwealth Bank of Australia (CBA), Westpac, National Australia Bank (NAB), and ANZ-are actively reducing their dependence on mortgage brokers.
This strategic shift aims to bolster profit margins that have been under pressure due to lower interest rates, rising operational costs, and intense market competition.
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.
Published:Tuesday, 18th Nov 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Commonwealth Bank of Australia (CBA), the nation's largest bank by market value, has reported a modest increase in its first-quarter cash profit for 2025. This uptick is primarily attributed to robust growth in home loans and household deposits. The unaudited cash profit stands at approximately A$2.6 billion, marking a 1% rise from the previous two-quarter average and a 2% increase compared to the same period last year. - read more
Australia's leading banks-Commonwealth Bank of Australia (CBA), Westpac, National Australia Bank (NAB), and ANZ-are actively reducing their dependence on mortgage brokers. This strategic shift aims to bolster profit margins that have been under pressure due to lower interest rates, rising operational costs, and intense market competition. - read more
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