When Rose was moving from regional Victoria to Melbourne's leafy outskirts, she wasn't going to walk into a bank branch to sort out the loan.
"I find that by going through a broker, it's more of a streamlined service, it's more personalised to your needs," she says.
"They just take care of everything for you. It's a lot easier."
Rose's husband Paul is self-employed, an element some lenders find thorny to deal with.
"It's always a lot more complicated when you go through a bank," she says.
Rose is part of a bigger trend.
Just five years ago, mortgage brokers wrote 55 per cent of all home loans in Australia. Soon that will top 75 per cent.
The day before the Reserve Bank’s latest board meeting to set interest rates, brokers say they are busier than ever.
Their share of the market keeps growing despite brokers still being paid in a way a royal commission has described as "conflicted" and "money for nothing".
Broker boom
Two years of steep hikes in interest rates have sent more customers to brokers to get a better deal on their home loans and reduce crippling repayments.
"When you go to a bank, they give you their solution," Melissa Gielnik, a broker based in Melbourne, says.
"When you come to a broker, we give you multiple solutions, and brokers generally find you the best rate out there in the market."
Melissa Gielnik of Smart Lending says banks need the pipeline of work from brokers. (ABC News)
People are voting with their wallets, shunning banks and going to brokers.
New data from peak body the Mortgage & Finance Association of Australia (MFAA) found for the quarter to June mortgage brokers wrote 73.7 per cent of all new home loans, the second-highest result on record and a 6.5 percentage point increase from the same quarter a year ago.
"Customers want more options. They want to see more solutions. They want the best deal," Ms Gielnik said.
Billions in play
Banks pay brokers fees and commissions for bringing loan customers to them, essentially for "arranging" the loan.
If you want to know why banks are unhappy with the growth of brokers, a round figure will help: $100 billion.
Through the June 2024 quarter, the value of home loans settled by mortgage brokers exceeded this level for the first time.
"I think what it really comes down to is what customers choose," MFAA chief executive Anja Pannek says.
"What we're clearly seeing is that the mortgage broker proposition to their clients is resonating."
MFAA chief executive Anja Pannek says brokers have "absolutely embraced best interest duty". (ABC News: Steve Keen)
"It's not actually just on helping them get the mortgage, but educating them around what's required, getting them 'finance ready', helping them understand the landscape overall," she says.
The strength — and growth — is a long way from what looked like happening to the industry in 2018, when it was savaged for a raft of conflicts and scams that were dudding customers.
Commission kicking
The banking royal commission got stuck into brokers, ironically about the concept of commissions.
Commissioner Kenneth Hayne called it "conflicted remuneration" and derided trailing payments, lasting for years beyond when loans were arranged, as "money for nothing".
Commissioner Kenneth Hayne said it was "not easy to determine for whom a mortgage broker acts". (AAP: David Geraghty)
At the time, plenty of loans came via brokers. But it was a much lower percentage of the overall market.
Approximately 40 per cent of all Commonwealth Bank loans came through brokers when the royal commission was examining the issue. For ANZ it was 55 per cent.
The figure has grown massively since.
Mr Hayne understood the importance of brokers helping borrowers with advice about what was likely "the most valuable asset they will buy in a single transaction".
But he hated the conflicts inherent in the relationship and how brokers were paid.
"It is not easy to determine for whom a mortgage broker acts," the final report, released in 2019, read.
"The lender pays the broker, not the borrower. Typically, the lender pays a commission, both an up-front commission and a trail commission … The lender seeks to treat the broker as its broker, and have the broker treat it as the broker’s preferred lender. Yet, at the same time, the lender provides in its contracts with brokers and mortgage aggregators that they act for the borrower, not the lender."
The commission was also disturbed by evidence that in many cases brokers "did not make sufficient inquiries, or did not seek sufficient verification" of borrowers' financial circumstances.
"The fact that the broker is paid only if a loan application succeeds stands as an obvious motive for that kind of conduct," the report read.
"It is in the broker's financial interests to have the lender approve the loan … payments by banks to intermediaries have induced some to engage in other forms of dishonest conduct."
Recommendation ignored
Mr Hayne made two key recommendations.
Commissioner Kenneth Hayne and then-treasurer Josh Frydenberg (right) with the final report from the banking royal commission. (AAP: Kym Smith)
The first was that the law be changed to insist mortgage brokers "must act in the best interests of the intending borrower".
This so-called "best interests duty" was opposed by the industry, but was enacted.
The second recommendation was that borrowers, not the lender (generally, a bank), should pay the mortgage broker a fee for arranging the loan.
Of the 76 of Mr Hayne's recommendations, this was the first to be ruled out.
Despite overwhelming evidence that loans arranged by brokers tended to be larger, took longer to pay down and cost more than loans arranged directly with banks or other providers, the then-Morrison government announced brokers would keep both up-front and trailing commissions for at least the next three years.
They have kept them since.
'Best interests'
Broker Donna Campbell doesn't think about it much.
"At the end of the day, we're governed by the legislation and we need to make sure that it meets the clients' needs," she says.
"At the end of the day, I don't even know what my banks pay me, to be honest. I just look out for what my client wants."
Donna Campbell, an experienced mortgage broker in Melbourne's growth suburbs, says what she offers her customers is choice. (ABC News: Darryl Torpy)
The experienced broker — who arranged Rose's loan — says the best interests duty makes it clear brokers have to put the customers first.
"At the end of the day, it's a client's choice where they decide to go, and we work on what best suits their needs, as far as products and what they require out of a home loan and all that sort of stuff."
Lack of enforcement
While the vast majority of brokers work for their customers, Tom Abourizk is concerned that the regulator, the Australian Securities and Investments Commission (ASIC), isn't taking a leading role in holding bad brokers to account.
Apart from cases where it was "in the background", the head of policy at CHOICE can't recall a single prosecuted case that alleged a breach of the best interests duty.
"It's not something that's been particularly proactively enforced," he said.
CHOICE head of policy Tom Abourizk says brokers have grown more popular because of the complexity of the mortgage market. (ABC News: Scott Jewell)
He acknowledges customers are "voting with their feet" by choosing brokers, but maintains some scepticism everyone is getting the best deal.
"One of our major concerns with mortgage brokers is that still a majority of loans that they write go to the Big Four banks or one of their subsidiaries," Mr Abourizk says.
Those banks rarely offer the best rates.
"So what is leading brokers to sign up more of their customers still with the Big Four?" he asks.
"It might be that they have faster, quicker systems and approval processes.
It might be that there are longstanding relationships that mean that they can send bulk applications.
It might also be that they are offering the better deals for brokers, but it's really hard to know."
While brokers use the products of banks and send customers their way, the big institutions remain unhappy about how customer tickets are being clipped on the way through.
Bank anger
The decline of people signing loans directly with banks was a flashpoint of recent hearings of the Standing Committee on Economics in the House of Representatives, which recently questioned the bosses of all Big Four banks (Commonwealth, NAB, Westpac and ANZ).
At issue was a change the Commonwealth Bank made in allowing bonuses to exceed 50 per cent of salary, up to 80 per cent for its brokers. Theoretically, a manager on a $200,000 annual salary could earn up to $360,000 if they hit certain targets, such as selling loans.
Commonwealth Bank chief executive Matt Comyn speaking before the House of Representatives Economics Committee on August 29. (ABC News: Adam Kennedy)
That bank's chief executive, Matt Comyn, described the oversight, "scorecards" — which balance failings and non-monetary factors against profits — and "risk gates" a person had to pass through to get that kind of bonus.
These safeguards attempt to avoid the issues of bonus-driven mis-selling exposed at the royal commission.
"To make the comparison — and I'm certainly not alleging that this is a problem (intrinsically) in the mortgage broking industry —we have 1,800 home lenders, and there are approximately 20,000 mortgage brokers," he noted.
"There is, as a matter of fact, no balanced scorecard. There is no fixed pay. They are entirely remunerated based on the number of loans they sell."
The income of most mortgage brokers is entirely, 100 per cent, based on commission.
If they don't write a loan, they don't make money.
"We thought the remuneration practices that we were limiting our people to were unfair. We still see it as a much lower-risk channel than the mortgage-broking channel."
NAB's chief executive, Andrew Irvine, said he was losing his best bankers because he didn't pay bonuses.
"Candidly, we made this decision to move reluctantly and it was not our or my preference to do so," he said, describing a situation he called "untenable".
"A few weeks ago I lost five of my very best bankers, home loan bankers, all of whom went to that particular competitor. In our exit interviews all identified the reason as the changes in remuneration.
"I'm not going to be able to serve customers well if I lose all my best bankers."
Choice fight
Banks, in some ways, did this to themselves.
By closing branches, they removed options for people wanting to check out their deals.
Brokers also offered choice and greater flexibility in dealing with customers not employed in traditional full-time work such as contractors and "gig economy" workers.
MFAA chief executive Anja Pannek says the commissions are both transparent to the customer and paid for by the lender.
"So you don't pay as a borrower overall," she says.
"You can take certainty in that, and also certainty in all of the remuneration regulation that is in place that importantly helps manage the conflicts that are inherent with a remuneration structure."
Ms Pannek sees the market share of brokers increasing. In the United Kingdom the share is closer to 90 per cent.
"So we will approach a [new] normal level. If that's 75 per cent, 80 per cent, I think it's definitely above what we're seeing at the moment."
Growth roll
Rose and her husband Paul are happy in their new home, with their three dogs running around.
They're looking forward to sampling nearby Yarra Valley wineries and enjoying rural life, while still being close to the city.
"Having a couple of acres where we can sort of be a bit self-sufficient and just enjoy life [is] fantastic," she says."
Rose isn't concerned by the commission structure her broker uses because she says it works for her.
"100 per cent. We don't mind paying her, especially the broker that we have. We trust her," she says.
"It's just that peace of mind that she gives us."