Major Banks Rethink Mortgage Broker Partnerships

Currently, mortgage brokers facilitate approximately 80% of new home loans in Australia, a significant increase from 50% six years ago. However, banks are now focusing on in-house mortgage origination to enhance profitability. CBA is at the forefront of this shift, with only 32% of its home loans broker-originated in 2025, compared to higher figures at Westpac (67.5%) and ANZ (67%).

To counter shrinking net interest margins—which averaged just 1.8% in 2025—banks plan to hire more lenders and boost in-house lending efforts. Proprietary channels yield 20–30% higher returns than broker-originated loans, allowing banks to avoid broker commissions and deepen customer relationships. Despite a 4.5% drop in combined annual cash earnings to A$30 billion, the banks are expanding their mortgage books, with CBA growing by 6% to A$664.7 billion and others by about 5%. Retail banking now accounts for about 45% of profits for these institutions.

For homebuyers, this strategic shift may lead to more direct interactions with banks during the loan application process. While this could streamline communication and potentially offer more tailored loan products, it also underscores the importance of understanding various loan options and terms. Prospective borrowers should stay informed about these changes and consider seeking independent financial advice to navigate the evolving mortgage landscape effectively.