Brokers divided on looming interest rate rise

Successful Ways director Scott Durrant said he thought an interest rate rise would lead to a cooling of Sydney property prices and allow more of his clients to enter the market.

“A lot of people aren’t buying because prices are going up too high, so they’re waiting for prices to drop. Rates going up means prices will stabilise, so more people will buy,” he told The Adviser.

Loan Market Melbourne franchisee Marios Rokka said cash rate rises always generated activity among clients.

“What tends to happen is any upward move tends to create a buzz around fixed rates and refinancing,” he said.

“What we’ll find is all new entrants into the mortgage space will begin to get a bit of fear, and our phones will start ringing about fixed rates.”

Home Loan Professionals managing director Nikki Meldrum said rising interest rates would be bad for her first home buyer clients and bad for her Brisbane-based business.

“I don’t think a rate rise would be good for the industry at the moment. I think we need to stabilise and let people feel a bit of comfort that they’re not going to be hit suddenly with high interest rates,” she said.

However, SPC Finance director Scott Christie told The Adviser his firm was not worried about the cash rate increasing.

“I think the rise would be fairly small, so I think it would have minimal effect on the industry. A quarter of a per cent doesn’t change whether people can afford a home or not.”

Chocolate Money managing director Harry Pontikis described the discussion about interest rates as “a little bit of a furphy” because rates would always bounce around.

“I think brokers need to be very aware of a person’s situation, and if mortgage pressures will tip someone over the edge as a result of a 0.25 per cent change, you really need to consider whether to put that person in a home loan,” he said.