Why Australian brokers are losing settlements they’ve already won

Australian mortgage brokers are writing more business than ever. According to the MFAA, brokers facilitated 77.6% of all new residential loans in the June 2025 quarter, the highest share ever recorded. The channel is winning.

But research reported by Broker Daily tells a different story inside the funnel. Data from Home Loan Experts suggests the conversion rate from pre-approval to settlement has fallen from around 60% in FY22 to just over 40% in FY25. That is not an industry-wide benchmark, so treat it as a directional signal rather than a ceiling. But the direction is hard to ignore.

The channel is winning market share. Many individual brokers are quietly leaking revenue between pre-approval and settlement.

Some of the gap is clearly market-driven. Borrowing capacity has compressed. Property prices have risen faster than serviceability assessments in many markets. Pre-approvals expire. Lender credit policies shift mid-search. Buyers take longer. These are real forces and no workflow fixes them.

But research suggests a significant share of the conversion gap is operational, not structural. The fracture point clusters consistently between pre-approval and lodgement, the stage where the advisory work is done and the client should be moving forward.

What breaks down at that stage is rarely strategy. It is follow-up that falls through the gaps. Documents that take days to collect. Clients who go quiet and do not get re-engaged in time. Pre-approvals that expire while the broker is managing other files. Status updates that require a phone call to produce.

Those are workflow problems. Workflow problems are exactly where AI and automation create leverage.

Fix the pre-approval to lodgement stage first. This is where most of the revenue is leaking and it is the most solvable part of the problem.

Automated document collection removes the back-and-forth that stalls files for days. AI-assisted compliance drafting cuts the time spent rebuilding BID documentation from scratch each file. CRM workflows that trigger re-engagement at the right moment stop warm clients from going cold between approval and property search.

The bottlenecks costing brokers settlements are consistent: admin drag, inconsistent follow-up, document collection delays, borrower disengagement and missed re-engagement windows. None of those require broker judgement to fix. All of them can be systematised.

One Australian loan processing firm estimates a single loan takes around 15 hours to move from lead to settlement, with document collection consistently identified as the primary bottleneck. The brokers pulling away from the pack are not working harder. They are removing the friction that causes clients to disengage.

A broker settling ten loans a month who improves conversion by even a few percentage points does not need more leads. They need fewer deals going quiet in a stage they have already won. The brokers spending on lead generation to compensate for funnel leakage are filling a bucket with a hole in it. The hole is between pre-approval and lodgement. In most cases it is fixable.

Sources: MFAA Industry Intelligence Service Report, June 2025 quarter. Pre-approval to settlement conversion data from Home Loan Experts as reported by Broker Daily, 2025. Loan processing time estimate from xSource, 2025.