Historically, mortgage brokers have played a significant role in Australia's home loan market, accounting for nearly 80% of new home loans in 2025, up from about 50% six years prior. However, banks are now focusing on in-house mortgage origination to achieve higher returns and strengthen customer relationships.
CBA leads this transition, with only 32% of its home loans originating through brokers in 2025. In contrast, Westpac and ANZ have higher broker-originated loan percentages at 67.5% and 67%, respectively. By enhancing proprietary lending channels, banks aim to avoid broker commissions and offer more personalized services.
The shift is also a response to shrinking net interest margins, which averaged 1.8% in 2025. Banks plan to hire more lenders and boost in-house lending efforts, as proprietary channels yield 20–30% higher returns than broker-originated loans. 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 consumers, this strategic shift may lead to more direct interactions with banks when seeking home loans. While mortgage brokers have traditionally offered a range of options from various lenders, banks' focus on direct lending could result in more tailored products and potentially better rates for customers who engage directly with their bank.
In summary, Australia's major banks are adapting their mortgage strategies to navigate current economic challenges and enhance profitability. By reducing dependence on mortgage brokers and strengthening in-house lending capabilities, they aim to offer more competitive and personalized services to their customers.
