Most brokers said that clients seek their advice about optimal home loan interest rates, which could mount pressure on brokers to demonstrate their value if rates rise, according to HashChing.
A survey by mortgage broking platform HashChing has found that almost 60.0 per cent of brokers still see the interest rate they can provide to customers as the number one reason clients seek their advice.
Other reasons for clients seeing a broker include customer service and customer loans (11.0 per cent), and loan flexibility (3.9 per cent).
Furthermore, the survey of brokers in the HashChing network during June found that over half (55.0 per cent) of respondents felt that an interest rate rise was likely this year.
These findings have coincided with the ANZ/Property Council survey results, which have revealed that 30 per cent of respondents from the property industry are expecting interest rate rises from the Reserve Bank of Australia (RBA) over the next 12 months.
In addition, when surveyed on refinancing activity, mortgage brokers indicated that refinancing is increasing for 44.0 per cent of brokers, but 56.0 per cent are not seeing more than they typically would for this time of the year.
Meanwhile, only 18.0 per cent of brokers are expecting the heat in the property market to increase by the end of December 2021.
Almost half of the broker respondents (48.0 per cent) said that it would remain at current levels, while a third (33.0 per cent) said it would begin to cool.
Brokers to feel pressure if rates rise
Commenting on brokers’ role in providing rate-related guidance to clients, HashChing chief executive Arun Maharaj cautioned: “Brokers are still seeing themselves as a portal to better interest rates for their customers.
“This is actually quite a pessimistic view of the profession – and one that means that if interest rates do rise, brokers will start to feel under pressure to demonstrate value.”
Speaking about broker predictions on interest rate movements, Mr Maharaj said that they are based around what the market could do (given that many lenders have been increasing their fixed mortgage rates already) rather than what the Reserve Bank of Australia would do.
Mr Maharaj also said that the more pessimistic view about the property market would imply that brokers “don’t see a major reason for celebration from the recent federal budget announcement”, as the federal government is seeking to boost the economy through the property industry.
He said: “We’re not too surprised to see the ‘great refinancing’ alluded to in the media not really come to pass.
“This is still a conservative time for many, and that will be reinforced by the NSW lockdown. Brokers are expecting the market to either cool or stay the same for the rest of this year, and they’re not often wrong in their predictions on this front, given their proximity to the heart of the industry.
That’s good news for first home buyers, and bad news for the government hoping to use the industry to kick-start the Aussie economy. But only time will tell!”
The survey also found that over a third (37.0 per cent) of brokers are not utilising video-calling technology for clients interactions, but the majority (55.0 per cent) are indeed using modern technology like videoconferencing to interact with clients, which Mr Maharaj said was pleasing to see.
He concluded: “This data was gathered before the NSW lockdown, so it will be interesting to see if that changes.”
[Related: 81% of brokers say refinancing on the rise]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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