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More younger borrowers are seeking out brokers for assistance as rates continue to rise and as the fixed-rate loans come to an end, new research says.
Commissioned by Resolved Finance and conducted by Pureprofile, a survey of more than 1,000 borrowers found that 56 per cent of Gen Z borrowers aged 25–35 and 54 per cent of Millennial borrowers aged 34–44 intend on using a broker to help traverse the mortgage market when their fixed-term rates expire.
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This revealed an increase from the 42.5 per cent of Millennials (which was reported in 2018 by Roy Morgan) five years ago when the official cash rate sat at 1.5 per cent.
On the other hand, the research found that only 17 per cent of fixed-rate customers over the age of 65 will seek out a broker to review their options when their term ends, while 14 per cent will DIY and 58 per cent will stay on their current mortgage product.
Additionally, the survey found that fixed-rate borrowers in Perth and Sydney were the most likely to use a broker, at 58 per cent and 52 per cent, respectively.
Resolve Finance managing director Don Crellin said the broking industry has been braced for the end of fixed-rate terms.
“It’s already been a record period for us with 34.62 per cent of total settlements coming from refinancing since rates began to increase in May 2022,” Mr Crellin said.
“This doesn’t include activity our brokers undertake to negotiate a better rate to help our borrowers stay with their existing lender.
“The challenge for the industry is persuading older borrowers to use broker expertise to review their options. Our research found greatest levels of inertia and DIY in the older generations.”
Mr Crellin further commented that they have seen evidence that the age groups who tend to use brokers may “better withstand interest rate increases” as they’re more likely to refinance immediately and less likely to stay with their current lender on uncompetitive rates.
A double winner at the BBAs WA
Brokerage Resolve Finance has been making waves for its customer service and client support recently.
In Western Australia, Resolve collected two awards at this year’s Better Business Awards Western Australia, picking up the Best Customer Service (Office) and Best Large Independent Office trophies while earning praise for the importance it has placed on training and education.
[RELATED: The fixed-rate mortgage cliff and how brokers can help]
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