Banks are cutting fixed rates to counter low growth in the credit market and brokers are the big winners. We speak to Tony MacRae about Westpac's strategy in the near term.
Video transcript below:
Donna Sawyer, Australian Broker TV
Donna Sawyer: Banks are slashing fixed rates in an effort to kickstart the sluggish credit market. Tony MacRae of Westpac says the banks recently announced two year fixed rate of 4.99% has attracted lots of attention.
Tony MacRae, Westpac
Tony Macrae: Our BDMs have been absolutely inundated with enquiries from mortgage brokers and our local mortgage broker squads have been out there proactively phoning and e-mailing their broker relationships to let them know about the wonderful offer. In addition, we have just recently announced that we are also dropping our 3 year rate to 5.29% under our premium advantage package.
Donna Sawyer: He says being competitive in the market doesn’t begin and end with low cost loans.
Tony MacRae: I think it’s short sighted for any lender to rely on either fixed or variable rates to run their business. As they say, ‘win on rate, lose on rate’. Mortgage brokers want great service and that can come in the form of exceptional relationships, great turnaround time, tools, technology, all of those sorts of things. We believe that what differentiates ourselves and will differentiate brokers in the marketplace is being able to add value to their business and we see technology playing a key role in that. So we are looking to invest in our mobile technology where we will be able to launch a range of tools that will range from e-learning modules, a broker tool kit, valuations and allowing the broker to become a true home loan advisor to a customer.
Donna Sawyer: But it’s not just banks that have a role to play in boosting activity. Tony MacRae says brokers are a critical part of the equation.
Tony Macrae: I think it’s really about brokers finding their niche and probably that’s around service, because they can differentiate themselves really in the service department. So that’s finding a great partner that can deliver the right products, turnaround and service capability that their customers require and then really focusing on those small fine detail things that makes a difference for a customer as they go through that high anxiety process of getting a home loan.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.