Brokers are set to benefit from major bank rate hikes, which are driving consumers into their arms.
According to newly-launched mortgage broker network 1300 Home Loan, the bank policy of setting interest rates independently of the Reserve Bank would be a boon for mortgage brokers.
In fact, 1300 Home Loan director John Kolenda claimed the business is seeing a 'surge' in consumer enquiries whenever there was confusion in the market about what was a fair rate.
“When banks do anything to create doubt in borrowers’ minds, trust drops and homebuyers seek independent advice from mortgage brokers instead of going directly to the banks,” Kolenda said.
“We have seen this before when banks failed to pass on official rate cuts but now that the banks have detached themselves from the RBA completely consumers constantly worry that they are being ripped off even when it’s not true.”
Kolenda said there was no obvious way for the banks to restore confidence because their funding costs were independent of the cash rate which was set by the RBA so they had to make their own decisions.
“This is a difficult time for the banks but a good time to be a mortgage broker because our service really comes into its own when the market is complicated and people want it explained,” he said.