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ISCOVER
Australian borrowers breathed a collective sigh of relief when the Reserve Bank chose to hold on interest rates at its July meeting.
The pause was only the second to occur in the central bank’s previous 14 meetings. During that time, Australian borrowers have faced repeated hits to their household budgets, with inflation and steadily increasing interest rates continuing to wreak havoc on their finances.
While the RBA’s decision may have provided a sense of relief for Australians across the country, the pause in rate hikes shouldn’t become a pause in brokers and lenders seeking better solutions for their customers.
While we’re days away from the next meeting and another potential increase (or, fingers crossed, another pause), Australians still have a moment to take a step back and take stock of their financial situation.
Recent ABS data (May 2023) has shown that despite the interest rate environment we’re in, new loan commitments are continuing to rise for housing (4.8%) and personal loans (4.3%).
As lenders and brokers, it’s on us to ensure we’re supporting the increasing number of Australians purchasing homes or other assets by using this time to help our customers re-assess their situation, and to act proactively to identify solutions to best suit their needs.
Here’s our tips to stay ahead of the curve:
1. Health checks for you and your clients
You need to make sure you’re set up for success before you can contribute to the success of your clients.
With a moment of pause, it’s a good time to take stock of your business and do a quick health check. Look at your books - where are your clients and loans coming from? Are you over-indexing on mortgages? Personal loans? Diving into your client mix can help you identify new opportunities.
Equally, you’re only as strong as your lending panel, and now’s the time to review. If you’ve typically avoided smaller lenders, take a closer look at them ahead of the RBA’s next meeting. There’s some sharp rates out there from smaller lenders that can offer similar - if not better - levels of customer service.
For smaller institutions, like MyState Bank, our broker channel is the backbone of our success, with over 82% of our home loans originating from brokers. We make it a priority that our service and products are reflective of how important those relationships are to us.
And for your clients, now’s the time to do a deep dive and understand where they’re all at in their lifecycle. Are they about to come off fixed rates? Are they on variable rates that could be sharper? Is there an opportunity to restructure their loan to their benefit? These are the things that should be on all of our minds as we look to support Australian borrowers.
2. Continuous Education
At MyState Bank, continuous education is a core part of our engagement with our broker network.
Whether it be through formal channels such as monthly MyKnowledge webinars, or informally through the relationships and ongoing dialogue our team has with our broker network, we firmly believe that education is the key to delivering better results for Australian borrowers.
3. Balance technology with a human touch
Look for lenders that leverage technology to make your job simpler, and match that with the human touch that can only come from a strong relationship between a lender and a broker.
MyState’s broker portal has a range of tools that help minimise turnaround times and speed up the process, that are then augmented by direct engagement between brokers and our team.
If you’re not using technology or working with lenders who are, now’s the time to start so you can drive better outcomes for your clients, and greater productivity for your business.
While we have a moment to take stock, it’s important that we use this opportunity for the benefit of borrowers so that we can make the mortgage cliff a little less steep for as many Australians as possible.
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