It urges reforms to boost homeownership
The MFAA has underscored the crucial role of mortgage brokers in promoting choice and competition in the home loan market in its latest submission to a Senate inquiry.
The submission, directed to the Senate Economics References Committee’s inquiry into the financial regulatory framework and homeownership, outlines four key areas the MFAA considers vital for improving housing access.
The MFAA presented eight recommendations aimed at helping more Australians enter the housing market.
MFAA CEO Anja Pannek (pictured above) noted that homeownership, a long-standing goal for many Australians, was becoming increasingly difficult to achieve. She pointed to rising housing costs, high inflation, and elevated interest rates as significant barriers for aspiring homeowners.
“The path to homeownership has become increasingly challenging,” Pannek said. “In today’s high inflation environment, with elevated interest rates placing further pressure on borrowers, it is becoming prohibitive for many Australians to enter the market.”
The submission identifies four areas for reform:
- improving access to credit,
- expanding government-backed home ownership schemes,
- fostering competition and innovation in the mortgage market,
- and enhancing financial literacy.
“Our submission examines whether current legislation and regulation either help or hinder access to home ownership and competition in the home lending sector,” Pannek said. “The broader policy challenge is balancing the need for universal access to housing with the socio-economic aspiration of homeownership.”
One of the key recommendations was a review of the Australian Prudential Regulation Authority’s (APRA) lending standards.
The MFAA proposed adjusting the serviceability buffer, which is intended to protect against financial risk but, according to Pannek, has become a significant barrier to refinancing, particularly in a rising interest rate environment.
“We propose a dynamic buffer that adjusts with interest rates, allowing more Australians to become homeowners,” she said.
The MFAA also advocated for simplification of government-backed home buyer schemes and called for greater collaboration between the mortgage broking industry and government bodies to raise awareness of these programs.
Pannek emphasised the need to refine these schemes to make them more accessible to first-home buyers, particularly those using mortgage brokers.
“It is essential that the mortgage industry is engaged in the development or refinement of these schemes to ensure they are accessible to first-home buyers who rely on mortgage brokers for guidance,” she said.
The submission also highlighted the role mortgage brokers play in educating borrowers about financial management and navigating the home loan process.
The MFAA called for proactive promotion of brokers’ services to ensure more Australians are equipped with the knowledge they need to make informed decisions about home ownership.
The MFAA consulted with its broker and aggregator members to prepare the submission, with Pannek thanking those who contributed their insights.
“As the peak body for the mortgage and finance broking industry, our members’ feedback is crucial in shaping comprehensive submissions,” she said.
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