Finding home loan customers at a time when the mortgage market is growing at its slowest pace for more than 30 years is no mean feat. So when you do find them you want them to ‘stick’.
With the economic uncertainty at the moment many customers are looking for assurance and security in their finances. One way you can help meet this customer need is by talking to them about Fixed Rate loans. With a fixed rate the customer locks in a regular payment for the agreed period of time. While fixed rates do provide certainty for the customer it is important to note that fixed rates will not suit everybody, especially if they may want to ‘top up’ their loan, sell their property or make large repayments during the fixed rate term.
A split loan may be the option. By splitting the loan between variable and fixed customers can gain access to low fixed rates for a portion of the loan while having the flexibility to pay off more of the principal on the other portion. Split loans do not have to be fixed 50/50, customers can choose to split 60/40, 70/30 or whatever they prefer.
However, it does mean the customer’s loan will stay on your book for the fixed rate period. Another way to make them ‘sticky’ is to meet multiple banking needs by ensuring the customer is cross sold other bank products such as a credit card and transaction accounts. Under the Commonwealth Bank package a wide range of products come with attractive fee waivers or discounts.
Customer satisfaction may have become the ‘buzz phrase’ for many businesses. However, our research in the market overwhelmingly points to a very solid financial basis for you to make it your business priority too. Put simply, the more products a customer has i.e. the deeper the relationship, the more satisfied a customer is and therefore the safer your trail revenue is.
Customers continue to seek quality advice from their Broker on which type of product is best for their housing finance needs. The more you can assist your customers to achieve their financial goals either directly through the home loan or by recommending them to specialist providers for non home loan products such as insurance and risk products, the more you will protect their assets and lifestyle. The more you do this, the more satisfied your customer will be and the more likely they are not only to ‘stick’ with you but also become an advocate for your business and provide future referrals.
Kathy Cummingsi is Executive General Manager of Third Party and Mobile Banking, Commonwealth Bank
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