Australian mortgage brokers are being urged to turn a likely RBA rate hike into a client‑retention opportunity by actively challenging “loyalty tax” pricing for existing borrowers.
With the cash rate tipped to rise today, Finance Brokers Association of Australia (FBAA) managing director Peter White (pictured) says brokers should be arming clients with a simple two‑step plan to avoid paying more than they need to.
Recent Equifax data shows mortgage demand finished 2025 at a three‑year high, with refinancing making up a large share of enquiries – a sign many borrowers are already shopping around as cash rate uncertainty lingers.
White says that while brokers understand the pricing game, many long‑term borrowers don’t realise just how far their rate can drift from the market.
“They don’t know that lenders often incentivise new business by offering lower rates to new customers than they provide to existing customers,” he said.
White believes a rising‑rate backdrop is the perfect moment to add value and deepen relationships.
“While many brokers are very proactive and regularly review rates for customers, when rates are expected to rise – either today or soon – we are presented with an opportunity to provide another level of service and if we are smart, lock in customers for life,” he said.
“Let’s tell them about the ‘lender loyalty tax’ and suggest they take two simple steps to be certain they have the lowest repayments on offer.”
Step one, White says, is for brokers to identify the most competitive rates in the market and get clients to push their current lender to match.
Many borrowers “aren’t aware they can renegotiate a rate during the term of a mortgage, so it’s our role to educate them,” he said.
“If the lender won’t budge, step two is for the broker to help the customer refinance at the lower rate.”
White also reminds brokers to reiterate their legal duty. He said it was important to reinforce to customers that a broker will do everything possible to source a better deal that meets their specific needs, and “unlike banks who act in the best interests of their shareholders, mortgage brokers are legally obligated to act in the customer’s best interests.”
Brokers can be a great support to customers when rates are rising as even a small increase of 0.25% will increase monthly repayments by around $115 on a loan of $700k, and more on larger loans, the FBAA leader said.
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