the adviser logo

Brokers divided on major bank rate hikes

by Emma Ryan5 minute read

Mortgage brokers have reacted with mixed feelings to news that all four major banks have hiked their variable rates.

Many loan writers have labelled the chain reaction “confusing” while others said it was unsurprising given current APRA regulations surrounding the big four.

“I understand what the justification is, I suppose, in terms of banks needing to hold more capital now. It just seems that it presents an opportunity for our mainstream lenders to profiteer from that requirement,” Freedom Home Loans owner Troy McErvale said.

“What is inevitable it seems is that the banks are saying 'it’s more important for us to make a greater profit at whatever cost and we’re not going to absorb any cost, we’re going to pass every cost that we can through to consumers'.”


No Fuss Mortgage director Laurie Gardner said he finds the move by the majors confusing given the competitiveness in the market of late.

“I find it very perplexing how it can be so cut-throat with all the discounts. They're giving on one hand and taking with another. Like most other people, most other brokers and customers, I think it is profiteering,” he said.

“I don't understand how all year it’s been very competitive with pricing concessions and discounting and now they're using APRA regulations to increase rates.”

Mr Gardner noted that the rate hikes make the job of a broker that much more important.

“I think it creates opportunities for brokers because it shows that brokers are needed more than ever to sort it all out. My phone has been running hot with questions from customers,” he said.

Meanwhile, Andrew Potter of G’day Mortgages & Loans said he has no issues with the increase in rates, describing it as an opportunity for smaller players to “steal a bit” of the major’s market share.

“In the way that ALDI has stolen a margin from the major retail supermarkets, you're going to see people start wanting to shop around,” he added.

“What I find interesting is that people want more impartial advice so they're willing to sit down with a broker and just really cut through the hype and say 'What do I need to know? Where do I need to be?'.”

Danny Luu of Pagoda Finance believes the rate hikes will give the Reserve Bank an opportunity to reduce rates in the coming months and will increase total broker market share overall.

“I think these rate rises make the broker advice more important now more than ever because you walk into any bank, you get given what they get told to give. You get someone to a broker and they get a spread of what others are offering,” he said.

[Related: Major bank announces variable rate changes]


argument  x


You need to be a member to post comments. Register for free today


Stephen Hale ta

MFAA launches near-prime, specialist loan resource

Coined Finance for when your customer doesn’t fit the mould: A broker’s guide to near-prime and...

Daniel Newell Gedda

Specilalist lender LoanU rebrands to Gedda

The personal and auto loan provider LoanU, which specialises in helping Australians with impaired credit histories...

tech tools

CBA introduces AI technology to combat scams

New figures released by the competition watchdog this week have revealed that Australians lost more than $2 billion...

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more