74% of Scheme First Home Buyers Come Through Brokers. At the Senate’s Final Hearing the Channel Asked for a Discharge Framework, Not More Borrowing Capacity

The week the two stories collided

Two things landed in the same few days. The Senate select committee wrapped its hearings program, with the Mortgage & Finance Association of Australia (MFAA) and the Finance Brokers Association of Australia (FBAA) among the industry witnesses at what The Adviser reported on 4 September as the inquiry’s eighth and final hearing. And realestate.com.au published its housing affordability read for the 2025–26 financial year, which Australian Broker reported on 5 September.

The affordability numbers are the backdrop everyone in that hearing room was working against. On that report’s measure, a median-income household on about $125,000 could afford roughly 12 per cent of homes sold nationally — the lowest share in a series that begins in FY95, below the 14 per cent recorded during the financial crisis. Mortgage repayments were running at about 35.5 per cent of average household income, above the 33.3 per cent of the GFC period and approaching the 37.5 per cent of 1989, when mortgage rates were far higher than today’s. South Australia screened as the tightest state and Victoria the most accessible.

The report’s senior economist, Angus Moore, tied part of the deterioration to the rate cycle: “The three RBA interest rate hikes made in February, March and May increased mortgage rates and further constrained household borrowing capacity.” His broader conclusion pointed elsewhere: “Without a meaningful increase in housing supply, affordability will remain a significant challenge, particularly for lower-income households.” REA Group chief executive Cameron McIntyre called the result “a damning reflection on housing policy and a clear call to action.”

Set against that, the obvious lobbying move for a distribution channel that gets paid when loans settle would be to argue for looser servicing. The channel did the opposite.

What the channel actually asked for

MFAA chief executive Anja Pannek opened by refusing the single-cause framing: “What our members see is that intergenerational housing inequity is not caused by any single factor.” She then ruled out the ask brokers are routinely accused of wanting:

The positive case she put in its place was deliberately modest in scope: “Our point is narrower, when someone can sustainably afford home ownership, unnecessary complexity, duplication, or inflexibility in the lending system should not prevent or delay them.”

The FBAA’s evidence ran along a parallel track, aimed at the entry end of the market. Chief executive Leo Gagic framed it as a documentation problem: “From a barriers-to-entry standpoint, it’s really around making sure that there is flexibility and that it’s not too onerous in terms of how loans are documented.” The association’s regulatory compliance specialist, David Carson, went further and proposed a structural change to how lenders are allowed to think about young borrowers.

Read together, the two submissions describe a channel arguing that the system’s execution layer — forms, timeframes, authorities, scheme access — is doing avoidable damage to borrowers who are already creditworthy. That is a claim brokers can substantiate from their own files better than anyone else in the market.

The four frictions, mapped to your file

Pannek named the friction points specifically, and the list will read like a description of last week to most refinance-heavy desks:

Her point about the consumer cost was blunt: “It is to the detriment of the consumer, especially if they’re able to avail themselves of a cheaper rate.” The remedy she proposed was a standard rather than a rate cap: “I think having a clear framework for discharges in the home lending system would help level the playing field with what our members are experiencing and what ultimately borrowers are experiencing as well.”

None of this is new ground for the industry. The ACCC’s Home Loan Price Inquiry recommended a 10 business day limit for lenders to action a discharge authority. The change the Commonwealth ultimately took forward was narrower — ensuring borrowers have direct and easy access to the forms needed to exit a mortgage. Broker Daily reported at the time that both associations regarded that as a step in the right direction that did not go far enough, with the MFAA specifically pointing to lenders declining to let brokers act for clients on discharge even where consent had been given. The MFAA has continued to advocate for a maximum discharge timeframe of 10 business days and for brokers to be able to manage the discharge with client consent.

The gap between the recommendation and practice is where your settlements team lives. NSW South Coast broker Tara Gibbs told Australian Broker that her business plans on lenders averaging closer to 20 days, and estimated that settlement and administration staff spend roughly half their working day chasing discharge coordination.

Why 74% is the channel’s real leverage

The most commercially significant number the MFAA put in front of the committee was not about rates. The Adviser reported that Housing Australia data indicated about 74 per cent of first home buyers accessing the government schemes did so through a broker. Alongside the association’s broader position that brokers now originate roughly 81 per cent of new residential home loans, that figure reframes what scheme design means in practice.

If three in four scheme-assisted first home buyers arrive through the broker channel, then any element of a scheme that is difficult to navigate through a broker, or any participating lender that does not accept broker-lodged scheme applications, is not a minor administrative quirk. It is a constraint on the main road into the scheme. The MFAA’s ask — that schemes be easier to navigate and genuinely accessible through the broker channel, and that participating lenders work with brokers — follows directly from that share.

For your business, the practical read is the inverse. If the channel is carrying that much of the scheme volume, scheme fluency is no longer a specialisation. Knowing which lenders on your panel actually accept broker-lodged scheme applications, and how their processes differ, is becoming core competence for anyone writing first home buyer business.

The safe harbour idea, read carefully

The FBAA’s most substantive proposal was Carson’s suggestion of a lender-side safe harbour for projecting income:

The reasoning is that career-stage income growth is real and currently unrecognised: “This would acknowledge that you’re young in your career, your incomes will naturally rise over that time.” Carson was careful about the risk on the other side — “we don’t want lenders to be reckless and to forecast unfairly on people, and expect that incomes are going to rise to meet excessive lending capacity” — while arguing that “the regime as it is now really penalises a lender for taking that risk and trying to extend opportunities.” He also questioned the design of lenders mortgage insurance, describing it as “a very arbitrary product, it kicks in at when you deposit less than 20 per cent.”

Two things are worth being precise about here. First, this is a proposal about lender risk appetite and the settings lenders operate under — it is not a change to a broker’s own obligations, and nothing in it has been adopted. Second, it would not touch the best interests duty. Under the National Consumer Credit Protection Act 2009, and as explained in ASIC’s Regulatory Guide 273 Mortgage brokers: Best interests duty, a broker’s obligation to act in the client’s best interests would apply to any recommendation made under a more permissive lender policy exactly as it applies today. A wider credit box changes what is available to recommend; it does not change the standard your recommendation is judged against. Confirm how any future change applies to your own authorisation with your licensee or aggregator compliance team.

The discharge friction audit: what to do this week

The committee’s recommendations, whatever they are, will take time. Discharge friction is measurable inside your own business now, and the brokers who measure it hold better client conversations than the ones who apologise after the fact. Here is a compact process for turning the hearing’s themes into desk data.

1. Pull your last 20 refinance settlements.For each, record the outgoing lender, the date the discharge authority was lodged, and the date the discharge was actioned. You are building an evidence base, not an estimate.
2. Build a one-page lender discharge map.For every lender you regularly refinance away from, capture three fields: where the discharge form lives, whether the lender accepts a broker acting on the client’s authority, and your observed average turnaround.
3. Reset the expectation at the recommendation, not at settlement.If a lender consistently runs long, say so when you present the recommendation. A client who was told to expect a longer discharge is a client who is not surprised by one.
4. Lodge earlier and standardise follow-up.Where your process allows, lodge the discharge once approval is unconditional rather than waiting, and set a fixed follow-up rhythm instead of ad hoc chasing.
5. Record the process, not just the outcome.Note who you spoke to, at which lender, on what date, and what they said. This is ordinary good file practice and it is what protects the file when a delay costs the client money.
6. Feed it back up.Aggregated, de-identified turnaround data is exactly the evidence your association was drawing on in that hearing room. Your aggregator and your association can only argue from what members report.

Several of these mirror what experienced settlements teams already do. Gibbs’ account to Australian Broker included lodging the discharge early to save days between full approval and settlement, recording precisely what was said and by whom, obtaining solicitor portal access to monitor progress, having the client nominate the broker as authorised on the discharge form where permitted, and confirming that all parties are working from the same PEXA identifier.

The lender map, in table form

What to watch next

• The committee’s report. Hearings have concluded. Whether a discharge framework survives into the recommendations, and in what form, is the single item with the most direct effect on broker workflow.
• Any move on a standard discharge timeframe. The 10 business day figure has been in circulation since the ACCC inquiry without becoming a binding standard. Watch whether it reappears with teeth.
• Scheme lender panels. If broker-accessible scheme design gains traction, expect participating lenders to be asked about broker lodgement. Know today which of yours accept it.
• Lender policy at the low-deposit end. The LMI threshold critique and the safe harbour idea are both aimed there. Movement will show up as policy notices before it shows up as legislation.

The strategic read

There is a version of this story where a housing inquiry produces nothing and the industry moves on. There is another where the channel has just spent its closing evidence establishing a reputation for asking for less than it could have. Arguing for process integrity rather than looser credit is a slower play, but it is the one that survives contact with a regulator, and it is the one that matches what brokers can actually evidence from their files.

Either way, the operational point stands on its own. A refinance recommendation can be entirely sound at the moment you make it and still land badly for the client if the discharge takes a month. You cannot fix the outgoing lender’s process. You can measure it, price the timeline into what you promise, escalate against a named contact, and keep a record that shows exactly what was done. That is work you control, and it is the part of this story that does not depend on what a Senate committee decides.