Login
ISCOVER
As more borrowers roll off their fixed-rate terms in the next year, the aggregator’s executive director has urged brokers to focus on those clients.
According to research conducted by the aggregator Connective, the number of fixed-rate loans expiring in the first quarter of 2024 will be 47 per cent higher than the same period in 2023, on average.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
By April 2024, the fabled fixed-rate cliff has been predicted to end, which will see these figures decrease over the second half of the year.
In light of this data, Mark Haron, Connective’s executive director, said brokers should be checking in with fixed-rate clients or clients who have recently come off their fixed rate.
“There is an opportunity and need to explore options for both,” Mr Haron said.
“Clients might’ve rolled from fixed rate into variable and are sitting tight, waiting to see what happens with interest rates. Or their fixed rate may be due to expire and they’re unsure about serviceability and fixing again. Either way, there are valuable conversations that brokers can have with clients.
“Sustained interest rate hikes have made it harder than ever for brokers to find ‘cheaper’ rates. Serviceability has become more challenging for borrowers making loan mobility harder also.”
Mr Haron said as competition from the banks is set to ramp up in the following year, data-driven client engagement will “give brokers a distinct advantage” and that the holiday period presents an excellent opportunity for brokers to “demonstrate how they can be a partner in this process” as people traditionally tend to review their finances in anticipation for the year ahead.
“Using a personalised approach to educate clients about their options may provide them with ways to improve their financial position and can help create client loyalty,” he said.
Furthermore, he added with the end of the fixed-rate cliff in sight, it’s vital for brokers to ensure that every client has the “correct information relevant to their situation” in order for clients to be able to make informed decisions.
“The ability to tailor this information is one of the differences that brokers can offer,” Mr Haron said.
“The biggest opportunity for brokers right now is probably focusing on how they can help clients who have recently come off a fixed rate or are about to – [as] opposed to just focusing on new loans.
“As we all start thinking about 2024, I encourage every broker to take a moment and consider what your fixed-rate clients need to know about their loans.”
[RELATED: Trail Homes launches alternative finance facility]
JOIN THE DISCUSSION