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FBAA chief executive Peter White says now is the perfect time for brokers to show their worth to borrowers, after Westpac yesterday raised its variable mortgage rates.
The major bank increased its headline investor and owner-occupier rates by 20 basis points to 5.95 per cent and 5.68 per cent respectively, effective from 20 November.
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Mr White said Westpac’s rate changes were no surprise as lenders are facing greater scrutiny in regulatory requirements, but noted that it is borrowers that unfortunately have to pay the price.
“I predicted this rise some months ago even though official cash rates were at record lows. It is not surprising that banks were going to increase their capital adequacies and that borrowers would pay the price in the interest areas. So this is expected albeit not welcomed,” he said.
Mr White said it presents an ideal opportunity for brokers to show their value to customers by helping them navigate through “the maze of the many options available to them”.
“Refinancing is one option of course, but more than that, brokers have the knowledge and the contacts to get their customers into an arrangement that best fits them when circumstances change,” he said.
Mr White said a rate rise is usually an emotional experience for borrowers, but it is brokers who are best able to communicate and provide clarity on what an interest rate means to them and the household budget.
“This is a big part of our ongoing training and personal development programs. Our brokers get schooled into communicating the right messages to their customer, alerting them to the whys and wherefores of any rate movement and keeping them at all times in the loop,” he said.
[Related: All majors tipped to lift mortgage rates]
