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One of the country’s most successful loan writers has explained how recent pricing changes has forced his business to be more rate driven than in previous years.
According to RateCity, close to two-thirds of lenders have increased their fixed rates while a smaller number have started lifting their variable rates.
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“We're never been really a rate driven business, but we've kind of been forced to become more rate-driven in the last 12 months,” Mark Davis of the Australian Lending & Investment Centre (ALIC) told The Adviser.
“If you aren't pricing, your clients are going to leave you, and if you're not proactive to try and get them on a better rate, the brokers out there will be in a fair bit of strife,” he said.
“Prior to that all the rates were pretty similar, so you didn't have to keep an eye on it.”
NAB became the latest major bank to reprice its home loans, announcing last week that it has cut its one-year fixed rates for owner-occupiers and investors.
Meanwhile, NAB’s two, three and four-year Package Fixed Rate for Home Loans have increased to 3.98 per cent, 4.09 per cent, and 4.59 per cent per annum respectively.
Mortgage Choice chief executive John Flavell believes further rate hikes are likely.
“Over the last couple of months, we have seen the United States’ Central Bank lift the Federal Funds rate by 25 basis points. In addition, funding costs have started to rise, which could encourage the Reserve Bank of Australia and, in turn, Australia’s lenders to lift rates,” he said.
“With this in mind, now really is the perfect time for borrowers to review their mortgage and make sure they are still in the right product for their needs.
“By reviewing their home loan, borrowers may find there is another product on the market that is better suited to their needs.”
[Related: CEO encourages mortgage review following rate hikes]
