The rise of AI in finance is poised to significantly disrupt the mortgage broking industry, potentially rendering traditional roles obsolete in the coming years. As borrowers gain direct access to sophisticated AI tools, the need for intermediaries like mortgage brokers is likely to diminish. Below, I outline how AI is reshaping borrower behaviour and why careers in mortgage broking face a limited future.
1. AI-Powered Borrower Empowerment
AI technologies enable borrowers to independently navigate the mortgage process with unprecedented ease and efficiency.
Key advancements include:
- Automated Loan Comparison and Selection: AI platforms can analyse thousands of mortgage products in real-time, considering interest rates, fees, terms, and eligibility criteria tailored to a borrower’s financial profile. Tools like these, accessible via apps or websites, eliminate the need for a broker’s expertise in sourcing and comparing loans.
- Personalised Financial Analysis: AI can ingest a borrower’s financial data—credit scores, income, debt, and spending habits—to recommend optimal mortgage products. Unlike brokers, AI operates 24/7, delivering instant results without human bias or delays.
- Streamlined Applications: AI-driven platforms can automate loan applications, pre-approvals, and document verification, reducing the manual coordination traditionally handled by brokers. For example, technologies like optical character recognition (OCR) and natural language processing (NLP) allow borrowers to upload documents and receive real-time feedback.
These capabilities mean borrowers can bypass brokers entirely, accessing tools that are faster, cheaper, and often more transparent.
2. Declining Value of Broker Expertise
Mortgage brokers have historically thrived on their ability to navigate complex lending landscapes and offer personalised advice. However, AI undermines this value proposition:
- Data-Driven Insights: AI systems leverage vast datasets, including real-time market trends and lender policies, to provide recommendations that rival or surpass human expertise. Unlike brokers, AI doesn’t rely on outdated knowledge or limited lender networks.
- Transparency and Trust: Many borrowers perceive brokers as potentially biased due to commissions from lenders. AI platforms, marketed as neutral and data-driven, can build greater trust by disclosing their algorithms’ logic or offering side-by-side comparisons without hidden incentives.
- Cost Efficiency: Brokers charge fees or earn commissions, which can deter cost-conscious borrowers. AI tools, often free or subscription-based at a low cost, present a compelling alternative, especially for tech-savvy younger generations.
As AI democratises access to financial tools, the broker’s role as a knowledgeable intermediary becomes less critical.
3. Automation of Broker Functions
Many tasks performed by mortgage brokers are repetitive and rule-based, making them ripe for automation:
- Client Communication: AI chatbots and virtual assistants can handle borrower inquiries, explain terms, and guide users through the mortgage process, reducing the need for human interaction.
- Document Processing: AI can instantly verify income, credit, and property details, tasks that brokers spend significant time coordinating with lenders and clients.
- Negotiation and Advocacy: While brokers negotiate with lenders on behalf of clients, AI systems can simulate negotiations by identifying lenders with flexible terms or pre-approval offers based on algorithmic predictions of lender behavior.
As these functions shift to AI, the demand for human brokers will shrink, particularly for routine mortgage transactions.
4. Shifting Industry Dynamics.
The broader financial industry is also adapting to AI, further eroding the broker’s role:
- Direct-to-Consumer Lending: Banks and fintechs are investing in AI-driven platforms that allow borrowers to interact directly with lenders. For instance, some companies already offer end-to-end digital mortgage experiences, bypassing brokers entirely.
- Regulatory and Compliance Automation: AI can ensure compliance with lending regulations, reducing the need for brokers to act as compliance intermediaries. This is particularly impactful in regions with complex regulatory frameworks, where brokers traditionally played a key role.
- Market Saturation of AI Tools: As AI tools become ubiquitous, lenders and borrowers alike will prioritise platforms that integrate seamlessly with their financial ecosystems, sidelining brokers who rely on manual processes.
5. Limited Future for Mortgage Broking Careers
The convergence of these trends paints a challenging picture for mortgage broking as a career:
- Job Displacement: Routine mortgage broking roles, especially those focused on loan sourcing and application processing, are at high risk of automation. A 2023 study by McKinsey estimated that up to 30% of financial sector jobs, including broking, could be automated by 2030.
- Skill Obsolescence: Brokers relying on traditional skills—product knowledge, client relationships, and manual coordination—will struggle to compete with AI’s speed and scalability. Only those who pivot to niche markets (e.g., complex commercial loans or high-net-worth clients) or adopt AI tools themselves may survive.
- Reduced Market Share: As AI platforms capture more of the mortgage market, brokers will face declining demand. In Australia, for example, brokers currently facilitate about 60% of home loans, but this share could shrink as digital platforms gain traction.
- Barriers to Adaptation: While some brokers may transition to advisory roles or specialize in areas AI cannot easily replicate (e.g., emotional intelligence in client hand-holding), the learning curve for adopting AI tools and the cost of re-skilling may deter older or less tech-savvy professionals.
6. Potential Counterarguments and Limitations
While AI’s impact is profound, some argue that mortgage brokers will remain relevant for complex cases or clients who prefer human interaction. However, these niches are shrinking:
- Complex Cases: AI is rapidly improving its ability to handle non-standard loans by analyzing unstructured data and predicting lender flexibility.
- Human Touch: Younger borrowers, accustomed to digital interfaces, may prioritize convenience over personal relationships. Even older borrowers are adopting digital tools as they become more user-friendly.
Brokers who survive will likely need to evolve into hybrid roles, combining AI proficiency with high-value advisory services, but this will sustain only a fraction of the current workforce.
Conclusion
Borrower access to AI is fundamentally reshaping the mortgage industry, automating tasks that have long defined the mortgage broker’s role. As AI empowers consumers with real-time, personalized, and cost-effective solutions, the need for traditional brokers is diminishing.
Careers in mortgage broking face a limited future unless professionals adapt to niche markets or embrace AI as a tool to enhance their services. The window for adaptation is narrow, and the trajectory is clear: AI is not just a tool for brokers to leverage but a force that could largely replace them.
For those entering or remaining in the field, the focus must shift to specialised expertise, like private lending or technological integration to stay relevant in an AI-driven world.
Opinion by Gordon Thompson, 20+ year industry professional
