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ISCOVER
Staff Reporter
Out of cycle rate hikes are driving borrowers into the arms of brokers, 1300HomeLoan has claimed.
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In the wake of the ANZ's decision last week to raise its standard variable rate by 6 basis points, 1300HomeLoan managing director John Kolenda said the company had noticed a surge in consumer enquiries whenever there was confusion in the market about what was a fair interest rate.
"When banks do anything to create doubt in borrowers' minds, trust drops and homebuyers seek independent advice from mortgage brokers instead of going directly to the banks," Mr Kolenda said.
"We have seen this before when banks failed to pass on official rate cuts but now that the banks have detached themselves from the RBA completely consumers constantly worry that they are being ripped off even when it's not true."
Mr Kolenda said there was no obvious way for the banks to restore confidence because their funding costs were independent of the cash rate, which was set by the RBA, so they had to make their own decisions.
"This is a difficult time for the banks but a good time to be a mortgage broker because our service really comes into its own when the market is complicated and people want it explained," Mr Kolenda said.
"People know they can come to a broker and find the best rate available in the market so they can borrow with confidence despite the monthly controversy over rates."
