MFAA drives home the importance of brokers in Senate inquiry

The Senate began an inquiry into Australia’s financial regulatory framework and home ownership, referred to the Senate economics references committee on 14 August 2024. The report is due 5 December 2024.

The MFAA has made a submission off the back of the inquiry, saying that brokers play a pivotal role in providing choice and competition in the loan market.

“The path to home ownership has become increasingly challenging. The rising cost of housing has been pushing home ownership further out of reach for many Australians for a number of years,” said MFAA CEO Anja Pannek.

“In today’s high inflation environment with elevated interest rates placing even further pressure on borrowers, it is increasingly prohibitive for aspiring home owners to enter the market. Our submission considers the appropriateness of current legislative and regulatory frameworks in inhibiting or enhancing greater pathways for home ownership and encouraging competition in the home lending sector for the benefit of borrowers.”

In the submission, the MFAA addressed four key themes that require attention:

1. Addressing aspects of financial regulation to facilitate access to credit
2. Government-backed home ownership schemes
3. Facilitating competition and innovation in the mortgage market
4. The importance of financial literacy

“The debate between the right to affordable and appropriate shelter versus the right to buy a home highlights a broader policy challenge: balancing the need for universal access to housing with the socioeconomic aspiration of home ownership,” said Pannek.

“The APRA serviceability buffer, for example, is critical in managing systemic risk but does not always accommodate the individual circumstances of borrowers. Indeed, our members have cited the rigid application of serviceability buffers under APRA’s standards as the number one barrier to refinancing for many borrowers, especially in the context of rising interest rates.

“We propose a dynamic buffer that adjusts with interest rates – shifting up when interest rates decrease or down when interest rates increase – is more appropriate and will allow more Australians to become home owners.”

The recommendations made to the government are reportedly in the hopes of providing more effective outcomes for consumers. “Greater access to finance for first home buyers” was a key theme in the submission.

“It is important to ensure an appropriate level of mortgage industry engagement as schemes are refined or new ones developed to ensure these can be accessed by potential first home buyers who use the services of a mortgage broker, given this is where most first-time buyers and first home buyers seek guidance from,” Pannek said.

“By encouraging first home buyers to see a mortgage broker in all instances will ensure more Australians are equipped with the knowledge and confidence needed to understand their options to enter the housing market and achieve financial security.

“As the peak Association for the mortgage and finance broking industry, we are the voice of our members. So, insights from our members are crucial to ensure diverse perspectives are represented and our submissions are comprehensive. We thank our members who participated in our consultation for this submission.”

Related: Mortgage brokers remain popular choice for home loans

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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