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Fixed-rate borrowers who have English as a second language are more likely to use a broker to refinance than native speakers.
New research from brokerage Resolve Finance has revealed that 70 per cent of fixed-rate borrowers who have English as a second language (ESL) plan to use a mortgage broker to refinance after their current fixed-rate mortgage ends.
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This is higher than the proportion of native English speakers who plan to use a broker to navigate the ‘fixed-rate cliff’ (55 per cent).
According to the survey of 1,000 mortgagors, conducted by Pureprofile in May 2023 on behalf of Resolve Finance, 45 per cent of native English speakers intend to refinance without using a broker, instead opting to navigate the mortgage marketplace on their own once their fixed-rate mortgage ends.
Meanwhile, just 30 per cent of ESL home owners prepare to go it alone.
Reflecting on the figures, Don Crellin, the managing director of Resolve Finance, said the research highlighted the need for diversity and language representation in the mortgage broking industry.
Mr Crellin commented: “Language barriers should never hinder individuals from accessing the information and support they need to make informed financial decisions.
“This is a unique point in time where we have an unprecedented number of borrowers on fixed-rate details who will soon be migrated to steeper variable rates.
“Brokers have an important role to play helping borrowers navigate the mortgage landscape,” flagging that his business has recently attracted a number of multilingual brokers to help ensure that borrowers benefit from “clear communication, cultural understanding, and tailored guidance to ensure they can unlock the best deal available to them”.
Indeed, mortgage broker and Resolve Finance — Derrimut franchisee Niti Bhargava has been specialising in offering financial literacy support to women from the Indian subcontinent after her own personal experience getting a mortgage was less than smooth.
The Resolve research also found that nearly two-thirds (65 per cent) of ESL home owners have reviewed their variable-rate mortgage within the last 12 months, surpassing the 58 per cent of native English speakers who have done the same.
Mr Crellin commented: “It’s great to see so many borrowers reviewing their mortgage in the current climate but we can also see a lot of fixed-rate borrowers are uncertain about what the future may hold for rates and will, as a result, delay the decision to refinance.
“This really highlights the need [for] brokers to be on the front foot and make sure their clients are aware of all the options. This includes helping those who plan to stay [with] their current lender negotiate to achieve the best possible terms.
“For all borrowers, the cost of inaction is too great.”
[Related: Broker launches financial literacy education for female migrants]
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