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While refinancing has been rising recently, Loan Market’s executive chairman has highlighted how brokers have been helping clients reprice their mortgages with existing lenders.
Loan Market executive chairman Sam White has underlined the importance of brokers maintaining an ongoing relationship with their clients that stretches beyond the home loan transaction, including by negotiating for better rates on their existing loans.
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Addressing property investors and landlords at a webinar hosted by Loan Market and Ray White last week, Mr White observed that Loan Market has been seeing more enquiries from clients around repricing their loans.
Mr White highlighted how brokers have been working with customers beyond the initial home loan transaction, offering ongoing service, even when it is not income generating.
“It’s not just about getting a deal done. It’s been about helping the existing customers that we have,” Mr White said.
“In fact, for one of our brokers who won an award for helping the most clients, there’s 417 pricing requests in a month. That’s repricing, [with] existing customers getting a better rate from an existing bank, without there being the [need for the] client having to move at all.”
Indeed, data shows that more borrowers are looking to take advantage of the low interest rate environment and competitive offers from lenders by refinancing.
However, Mr White highlighted that brokers can help reprice loans with existing lenders, too, regardless of whether the client has been affected by the economic ramifications of the coronavirus pandemic.
He outlined that investor clients who took on a mortgage two or three years ago could be on interest rates of around 4 or 5 per cent. However, in the current low interest rate environment, there are loans available with much lower interest rates.
“Don’t just be passive. Be active. Contact your broker,” Mr White told investor viewers.
“It’s a free service. They can look at all your options, make sure you’re getting the best possible deal in the marketplace. Or, [they can] at least present options to you [and] you can make informed decisions.”
Mr White said the way in which a broker continues to support clients after the home loan transaction is just as important as the transaction itself.
“All of our brokers believe that this is an ongoing relationship where we want to help not just at the transaction but right the way through.”
Mr White added that Loan Market brokers have also been assisting investor clients with repayment pauses, reduced repayments and moving them to a temporary interest-only loan, where appropriate.
However, addressing the repayment deferral measures announced by various banks to assist those facing financial hardship due to the pandemic, Mr White emphasised that it was “important to remember that it’s not a suspension. You’ve got to pay that money and then pay that interest back".
“Even if you have to reduce payments so you’re paying something, that can ease the burden when you come out of this,” he said.
Being across lender policies
Given that lenders have announced various changes to policies during the pandemic, with each lender treating different industries and terms of employment in different ways, the Loan Market executive chairman emphasised how brokers are helping clients navigate the shifting landscape.
Mr White said Loan Market has 62 total lenders on its books, including 40 residential lenders.
“Some treat self-employed differently, some look at different industries differently, some have different rates, some have cashbacks. It’s confusing,” he said.
“Some of the lenders are looking at self-employed a little bit more closely than they were, having a tighter policy.
“There are lenders with different JobKeeper policies for different businesses. So, that’s been fairly dynamic and shifting a fair bit,” he concluded.
[Related: Loan Market pushes forward on BID training]
