Login
ISCOVER
Big changes in the Australian mortgage market mean brokers are legitimately providing a value proposition to refinance customers, rather than chasing commissions, according to a bank analyst.
Speaking at the release of the JP Morgan Australian Mortgage Industry report last week, JP Morgan’s Scott Manning said borrowers are increasingly receptive to contact from brokers.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
“There has been a period of profound change in the mortgage market over the last six to 12 months in particular,” Mr Manning said.
“There has been big announcements by the regulator, big movements in house prices, re-emergence of significant out-of-cycle repricing as well, so I think people are quite receptive to a call from a broker to give them an update on the market,” he said.
Some borrowers may have “stale pricing” from an old mortgage provider and could be unaware of new offers, given the level of repricing activity towards the end of 2015.
Mr Manning said the market has become more segmented with different pricing and policy between investor and owner-occupied loans, interest-only loans and across different LVR bands.
“There is enough change for brokers to initiate that contact with a value proposition to the customer, rather than just saying ‘I can churn you so I can get a better commission’,” he said.
The JP Morgan report found that brokers have been initiating refinance deals for customers with bigger loan amounts.
For loans between $250,000 and $500,000, brokers initiated 10 per cent of refinance deals. This jumped to just over 20 per cent for loans of $500,000 to $750,000.
The report also found that 75 per cent of refinancers expect to use brokers.
[Related: ANZ closing branches with firm eye on broker channel]
