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By Tim Neary
July 11, 2011
Michael Russell
With one in four potential property buyers refusing to pay a fee for service brokers should weigh-up whether the industry is robust enough to forego a quarter of its new business.
This is according to Mortgage Choice CEO Michael Russell, as the debate around the fee for service escalates.
In the Mortgage Choice 2011 Fee For Service Survey 24% of the 1,050 respondents said they would not consider paying a fee - even if it was fully refundable upon the purchase settlement.
Russell said the survey validated that the industry is not yet sufficiently mature to introduce fees without penalising itself considerably.
And he confirmed that Mortgage Choice, based on this evidence as well as other consumer research and conversations with its brokers, would be postponing any action on the fee for service front until "at least the next financial year."
"We are taking into serious consideration our findings and will not move towards charging any fee if it puts at risk the business of 24% of potential customers.
"Mortgage Choice's present focus is on campaigning for improved consumer awareness of the value proposition presented by a professional mortgage broker."
Adding it came as no surprise that respondents would lean towards not paying for assistance that is currently free, Russell said that debate also raised questions around how lenders will react if fee for service came into play.
The survey was commissioned to Ticketek Insights and ran online over 27 May to 6 June 2011.
The 1,050 respondents were from all age groups and states/territories and all said they were potential homebuyers.
Other key results
- 61% said they would not pay a fee for using the services of a mortgage broker.
- Of the 39% who said they would, 50% would pay between $1 and $250, 32% between $251 and $500, 8% between $501 and $750, 10% more than $750.
- Of the 76% who would contemplate paying a fully refundable fee, 35% would pay between $1 and $250, 36% between $251 and $500, 11% between $501 and $750 and 18% more than $750.
Related Story
Resources boom pulls Mortgage Choice to Gladstone - Taking advantage of the town's population and wage growth resulting from the resources boom independently-owned mortgage broker Mortgage Choice last week officially opened its first franchise in Gladstone, Queensland, with great fanfare.
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