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The head of the Mortgage & Finance Association of Australia (MFAA) has taken aim at the country’s biggest banks for prioritising their proprietary lending channels, warning that any move to steer borrowers away from brokers risks eroding trust and limiting choice.
In an open letter published today (10 November), MFAA CEO Anja Pannek said recent statements from major bank chiefs – including NAB and Westpac – which outline plans to boost direct and digital home loan channels showed a “disappointing” disregard for the role brokers play in supporting borrowers, especially in regional areas where branches continue to close.
“Australian borrowers have a choice when it comes to how they approach financing their home. They are choosing mortgage brokers in record numbers, and for good reason,” Pannek wrote in the open letter.
According to the latest Comparator (Cotality) data, brokers facilitated 77.6 per cent of all new residential home loans in the June 2025 quarter, the highest market share on record.
Pannek said this record growth underscored that brokers’ value proposition of choice, trust, and expertise was resonating more strongly than ever.
“Collectively, brokers have access to more than 100 lenders, including many that borrowers can only reach through a broker,” she said.
“A mortgage broker doesn’t win a client on price; it’s a relationship built on trust and delivering outcomes.”
‘Banks don’t have a Best Interests Duty’
Pannek said that the broker channel offers safeguards and personalised guidance that banks’ in-house sales channels cannot replicate. Central to this, she noted, is the best interests duty (BID), the legal obligation requiring brokers to act in their clients’ best interests.
“It’s an obligation no banker, with one eye on their sales targets and year-end bonus, is required to meet,” she said.
By contrast, bank staff are bound by internal performance metrics rather than statutory duties to prioritise the customer’s outcome, Pannek said.
Brokers’ deep understanding of credit policy and their ability to navigate complex financial circumstances make them indispensable to borrowers seeking tailored solutions, Pannek added.
She questioned how banks, many of which have reduced their branch footprint, could deliver the same level of personal connection and advice that independent brokers provide daily.
“The challenge of supporting borrowers is even more acute across regional and rural Australia, where lenders have progressively closed their branches, providing no physical means of support to these communities,” the MFAA CEO continued.
‘Channel conflict’ undermining trust
The MFAA head also warned that the industry was again seeing signs of “channel conflict”, where banks treat broker-introduced loans differently from in-branch applications.
“Members tell us of ‘under-the-counter’ branch pricing and cases where a borrower’s application by a broker is declined but then approved in-branch,” she said.
“These practices undermine the foundation of our industry: trust.”
Such behaviour, she added, damages relationships between lenders and brokers, wastes time and resources, and can result in poorer customer experiences.
“Allowing channel conflict to persist undermines the trust and respect we should always have for one another. It perversely destroys lender margin, especially when price undercutting and cashbacks come into play,” she said.
Pannek stressed that brokers and lenders were “trusted partners”, with brokers helping banks reach thousands of customers they would otherwise miss.
“Brokers do the work – preparing, educating, and qualifying borrowers – enabling lenders to lend efficiently and confidently, without rebuilding costly branch networks,” the CEO continued.
‘A home loan isn’t an add-to-basket purchase’
Pannek also took aim at the notion that home loans could be treated as commoditised, purely digital products.
“A home loan is not, let’s be clear, an ‘add-to-basket’ transaction,” she said.
“It’s the largest financial decision most Australians will ever take. It’s emotional, complex, and deeply personal.”
Borrowers deserve proper support to understand their options, the open letter states, and therefore must be free to choose, so they aren’t channelled toward a single lender, product or “black-box” solution.
Australia’s highly concentrated banking market, she warned, makes maintaining competition through the broker channel critical.
“Without brokers, Australian borrowers would be worse off, with fewer choices and more expensive mortgages. That’s an outcome no government, regulator or consumer advocate would welcome,” she said.
‘Borrowers will decide the industry’s direction’
While acknowledging that banks are entitled to pursue commercial growth, Pannek said the long-term direction of the lending industry would ultimately be shaped by consumer behaviour, not short-term corporate strategies.
“The direction of our industry won’t be determined by short-term corporate strategy aimed at ‘owning’ the customer,” she said. “It will be determined by Australians and the choices they make.”
With brokers now handling nearly four out of every five new home loans, Pannek said borrowers had already delivered their verdict.
“Every day more borrowers choose brokers, not because they have to, but because they want to,” she said. “They value real choice, trust, and expertise. And that is why I’m confident in what lies ahead for our industry.”
You can read the full open letter from MFAA CEO Anja Pannek here.
[Related: ‘No set target’ for home loan flows: Adam Brown]