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ISCOVER
By Blake Albones, Head of Lending Distribution at MyState Bank.
A perfect storm is brewing with Australians to face sharp interest rate increases as their long-term fixed interest period loans expire. In the eye of the storm, you will find brokers.
The Reserve Bank of Australia (RBA) estimates about 35 per cent of Australian home loans are on fixed rates, the majority of which were set around 2.5 per cent. About two-thirds of these will expire this year, turning into variable loans closer to five per cent. For an average MyState fixed rate mortgage holder, that can mean up to a 40 per cent increase in monthly repayments. But no matter which bank a person uses, their increase is likely to be similar.
When you add in the fact that the consumer price index (CPI) is continuing to rise, up 7.8 per cent last year, ongoing inflation and cost of living increases, and the RBA looking to keep raising the official cash rate to cool consumer spending, and it will be an increasingly turbulent time for many Australians.
Brokers have a huge role to play in helping Australians as they face these unprecedented challenges, especially for those fixed rate customers.
At MyState, we are tackling the fixed rate challenge by bolstering our team and working directly on the ground with both our customers and broker network.
We have been calling our customers in the weeks before their fixed rate expires and sending information to discuss their individual circumstances and working with them on the most practical solutions for their financial situation.
These include conducting proper manual assessment of people’s financial and life situations, and taking personal situations into account, as well as properly handling and protecting people’s information as scams targeting these people increase.
These are difficult times for customers, and we want to support them as much as we can. Therefore, we are also lowering our most popular fixed rates for new fixed rate loans.
MyState’s team is also working closely with its broker partners to help their customers manage their fixed rate expiries.
Our broker network is integral to how we conduct business at MyState. About 85 per cent of our home loan customers were brought on by brokers. We value our brokers and in turn we feel they trust our brand and the way we work together.
For example, MyState will continue to partner with brokers to provide some of the fastest settlement times in the industry - reducing your settlements to a few days, rather than weeks. We will work with you to quickly switch loans to better suit your customer’s needs, it is just another way our ‘human way to bank’ comes to life.
There is plenty of turbulence as we ride through this perfect storm, but MyState is here to help our customers and brokers through to calmer waters.
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