According to new research from Roy Morgan, in the 12 months to March 2018 nearly half of the existing home borrowers who used a mortgage broker over the last five years to obtain their current loan were millennials.
Roy Morgan’s Single Source survey of over 50,000 consumers per annum also included over 5,000 home loan customers with a loan held for five years or under.
Millennials, which Roy Morgan labelled as born between 1976 and 1990, made up 48.6% of the broker market. Millennials who had used a broker for their loan accounted for 42.5% of the generation.
Generation X, born between 1961 and 1975, made up 38.8% of the broker market. Compared to the entire generation, 37% of them used a broker.
Baby boomers, born between 1946 and 1960, were the third highest proportion of the broker market, holding 9% of the share. However, only 27.6% of the generation used a broker, below the percentage of generation Z.
Generation Z is listed as born between 1991 and 2005, and 36.9% of the generation used a broker for their home loan. Showing the difference in borrowers between generations, generation Z only took 3.1% of the broker market.
Norman Morris, industry communications director at Roy Morgan,said, “The dominance of millennials in the use of mortgage brokers to obtain their home loan is most likely due to a number of factors. These include the fact that this 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, mortgage brokers may be seen as possibly being a way of borrowing more as they have the potential to get a better interest rate.
“The data regarding mortgage brokers that has been used here is only a fraction of what we have collected on all aspects the home loan market over many years. The full database enables a detailed understanding of home loan holders currently, as well as trends. They can also be understood in context with all other financial products such as managed funds, superannuation, accounts, credit cards, insurance, direct investments.
“This more holistic understanding of the home loan market is important as home loans do not operate in a ‘silo’ but are part of each households overall financial position.”
