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Australians are refinancing their home loans in record numbers as cost of living pressures add to a surge in fixed rate mortgages reaching their expiry dates. These shifts are bringing customer retention into sharp focus for mortgage brokers.
The total value of refinances hit a fresh high of $21.2 billion in March 2023, up 28.5 per cent compared with the same time a year earlier, Australian Bureau of Statistics figures show. NAB forecasts refinance activity will peak at about $32 billion in the six months to September 2023.
With so many customers going through the refinancing process, many are turning to mortgage brokers for support in assessing their options. Mortgage and Finance Association of Australia figures show that more than seven in ten Australians choose brokers for their home lending needs.
Support from the outset
A home loan is an important and long-term decision and the market is changing rapidly. Brokers working to retain customers in this evolving environment need tools and support from lenders to be able to offer great outcomes to their customers.
NAB’s view is that customer retention begins right from the beginning of the customer-broker-lender relationship.
To support brokers and their customers from the start of the onboarding process, NAB has a team of bankers who provide assistance with tasks such as direct debit and repayment setups, Internet banking setup, and establishing offset accounts. These bankers have onboarded 7,000 broker-introduced customers in the first quarter of 2023.
For customers with aggregated lending over $850,000, NAB’s premier proposition compliments brokers’ offerings by providing a dedicated team of expert bankers who have been specially trained in understanding the broker-customer relationship.
A proactive approach
Maintaining existing customer relationships requires proactive support. Brokers who reach out to customers with meaningful assistance at times when they need it most will build stronger, more enduring relationships. In today’s dynamic market, this might involve offering advice on managing cashflows and budgeting, or reviewing the customer’s borrowing arrangements to achieve their goals.
NAB is supporting brokers and their customers by making proactive check-in calls to broker-introduced customers, with thousands of check-in calls made to customers in the first quarter of 2023.
Customers also receive communications from NAB at key milestones for their mortgages, including in the lead up to their fixed rate expiry or interest only expiry.
The consistent message in each of these interactions is for customers to get in touch with their broker to discuss their options – backed with targeted pricing offers for customers who are about to roll off their fixed rates.
Simple and digital
Technology is providing tools to improve customer retention by ensuring fast and seamless processes.
NAB’s investment in a digital self-serviced capability enables customers to make simple changes on their own via the NAB app – such as fixing and splitting loans.
For brokers, recent enhancements to NAB’s Instant Pricing Tool streamline the process for repricing existing NAB home loans by pre-filling existing customer and account information to make pricing submissions more accurate and quicker to complete.
The Instant Pricing Tool immediately provides a proposed rate when a broker submits a new pricing request, and if the broker accepts the proposed rate, that rate can be automatically applied directly into the eligible customer’s account. The customer can view the new approved rate straight away in their online banking, while brokers save time as there is no need to send emails and follow up on repricing applications.
When pricing requests are escalated for manual review, technology is helping to ensure brokers and their customers receive a quick response.
With economic conditions and customer circumstances changing rapidly, brokers have an important role to play in ensuring their customers continue to get great outcomes from their home lending. As the bank behind the broker, NAB is constantly improving its processes to make life easier for brokers so they can focus their energy on their businesses and building long-lasting relationships with customers.
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