On May 24, 2016

Where are investors sourcing their mortgages from?

With such a varied market when it comes to home loans, Australian property investors seem to have more choice than ever before. From big banks to small lenders to mortgage brokers, there are numerous avenues that house hunters can pursue.

And with the latest release of data from the Mortgage and Finance Association of Australia (MFAA), it appears that brokers are becoming the path of choice.

Record-breaking highs

The MFAA engaged comparator, a subsidiary of CoreLogic RP Data, to assess the proportion of lending that came from brokers during the March quarter. In 2015, brokers were responsible for $40.6 billion of new lending, or 51.9 per cent of all money loaned for residential housing.

This reflects not just a continued growth in demand for real estate, but an increasing preference to work with mortgage brokers.

This year, the respective figures have risen to $43.4 billion and 53.7 per cent – the highest it has ever been. This reflects not just a continued growth in demand for real estate, but an increasing preference to work with mortgage brokers.

"This growth is especially significant given that this research was conducted during a traditionally quieter period of the year," noted MFAA CEO Siobhan Hayden.

Why is this happening?

According to Ms Hayden, "homebuyers are realising the benefits of working with an accredited finance broker more than ever before".

But what are said benefits for property investors? While IBISWorld's Mortgage Brokers in Australia report states that investors generally have more experience and confidence in the housing market, it remains that professional property investment advice can prove invaluable, and brokers are well poised to deliver this.

From detailed information on specific investment mortgage products to financial planning advice regarding how to structure a loan, brokers can add to an investor's knowledge pool no matter how experienced they might be. 

Increasing your knowledge pool is an excellent way forward for investors.Increasing your knowledge pool is an excellent way forward for investors.

Dominating the industry

IBISWorld also estimates that investment mortgages make up about 39 per cent of all broker business – more than any other type of mortgage. This suggests that investors in particular already understand the importance of surrounding oneself with the right professionals. 

For those who have not, there are many easy entry points to getting the right advice and broker. Here at The REIN Group, we run investment property seminars and can help with anything from choosing the right home loan to calculating depreciation on a property. 

With CoreLogic RP Data's monthly indices to the end of April showing continued value growth across the country, investors can still benefit from strong capital gains. Contacting a financial professional is the first step along the way. 

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