Broker originated loans made up two-thirds of all new residential mortgages settled in the September quarter – a record for the mortgage broking industry.

According to data compiled for the Mortgage and Finance Association of Australia by researcher Comparator, broker share in the mortgage market hit 66.9 per cent in the quarter, an increase from 60.1 per cent in the September quarter last year.

Broker share has risen from around 55 per cent over the past two years.

MFAA chief executive Mike Felton said in a statement that the growth in broker share was the result of referrals from satisfied customers.

Another factor is the closure of bank branches. In October, APRA reported that the total number of branches fell 9 per cent to 4491 over 12 months. The number of branches has fallen by 22.8 per cent over the past five years.

Felton said the industry has made a smooth transition to the mortgage broker best interests duty, which took effect on January 1. He said this has given consumers another reason to use broker services.

Under the best interests duty, a broker should not recommend a loan by prioritising factors that cannot be substantiated as delivering benefits to that particular consumer.