Millennials are more likely than any other age group to go through a mortgage broker rather than directly through a bank, research by Roy Morgan reveals.
The research found that 42.5 per cent of millennials with a mortgage five-years old or less had used a mortgage broker – a far higher proportion than any other age group.
Roy Morgan classed ‘Millennials’ as anyone born between 1976 and 1990.
In the next generation bracket ‘Generation X’, which included anyone born between 1961 and 1995, 37 per cent of people with mortgages used a mortgage broker.
The figures plummmeted in the older generations. Just over a quarter of Babyboomers (born 1946-1960) had acquired their mortgage through a mortgage broker, while just over a fifth of those born before 1946 used a broker.
Millennials were also by far the biggest market for mortgage brokers, representing 48.6 per cent of of the market.
Gen X-ers were next 38.8 per cent. Together they accounted for 87.4 per cent of the market, as the pie chart below shows.
Norman Morris, industry communications director at Roy Morgan, put the dominance of Millennials down to a “number of factors”.
“[T]his generation has grown up at a time when mortgage brokers were always there and so that they are seen as a very familiar way of acquiring a home loan.
“This is in contrast to the older generations that they may be less likely to use them and so be more used to going directly to a bank.
“Another potential reason is that with rapidly rising house prices, combined with the fact that more millennials are likely to be first home buyers, then mortgage brokers may be seen as possibly being a way of borrowing more as they have the potential to get a better interest rate,” he said.
The big banks’ relationship with mortgage brokers came under the scrutiny of the banking royal commission in March.
Among other things, the commission heard that mortgage brokers may be encouraging homebuyers to take out larger-than-necessary loans thanks to the banks’ commission structures.