Macquarie explains rate cuts and broker approach in 2024

Broker's application approved within an hour by bank

Macquarie explains rate cuts and broker approach in 2024


By Ryan Johnson

Macquarie Bank has outlined its approach to the broker industry in 2024 while explaining the decision to make out-of-cycle interest rate cuts before the Reserve Bank’s February cash rate announcement.

Underlining the importance of brokers in the mortgage landscape, Wendy Brown (pictured above left), head of broker sales at Macquarie Bank, highlighted their vital role in facilitating homeownership.

“As a committed partner to the broker industry in Australia, our focus is on providing the best digital experiences to brokers and their clients throughout the home loan journey,” Brown said.

Macquarie Bank explains interest rate cuts

On Jan. 30, the bank issued brokers a new rate card that included slashed rates to some fixed and variable mortgage products.

Brokers generally reacted positively to this news, with some speculating whether other banks may follow suit.

On a variable rate side, the bank has reduced rates for new home loans by an average of 10 basis points across LVRs.

Macquarie made two increases to variable rates over the last six months, most recently in December, and this latest update effectively unwinds that December increase. 

On the fixed rate side, Macquarie also made a range of decreases at the end of January across LVRs.

For example, its fixed rate product was slashed by 38 basis points based on owner-occupier and investment loans available for $500,000 at 80% LVR.

It is understood that the swap rates coming down was behind the decrease in fixed rates. 

Swap rates are interest rates on contracts where two parties exchange future cash flows. They are important because banks use them to manage their own borrowing costs by hedging risk.

When swap rates go down, it becomes cheaper for banks to hedge their fixed-rate mortgage offerings, making it possible for them to reduce the fixed-rate interest they charge borrowers.

This may be why AMP Bank, Bank of Queensland, ME Bank, and Northern Inland CU joined Macquarie Bank in slashing fixed rates last week.

Broker case study: Application turnaround time under an hour

Continuing on from last year, Macquarie Bank will prioritise technology investments in its platform this year, Brown said.

This focus aims to "consistently deliver market-leading turnaround times," according to Brown, boosting confidence and clarity for brokers and clients throughout the loan application process.

Mortgage broker Raj Ladher (pictured above right) from Equilibria Finance experienced this firsthand, describing himself as "blown away" by the speed. He shared his experience on social media and with Australian Broker: 

The scenario

Equilibria Finance had a client who saw a property on the weekend andadvised that her offer had been accepted subject to a few items. 

"Although we had a good understanding of the client's circumstances and requirements, we didn't have a pre-apporval in place," he said. 

The plan 

With time not on their side, Ladher's team researched lenders with competitive rates, good borrowing capacity, and "of course, a very speedy application process". 

"We do have a handful of lenders who can pick up and assess an applicaton within a matter of one to two business days, however, Macquarie Bank are constantly advertising service level agreements (SLAs) of four business hours," Ladher said. 

"With this in mind, we had no hesitation in recommending Macquarie Bank to the client based on being able to exchange on the property within the short timeframe we had." 

The outcome

With SLA timeline set, Ladher proceeded with the deal. Her was the outcome:

  • 10:36am: Loan application submitted.
  • 11:18am: SMS from assessor advising he will call to discuss application.
  • 11:27am: Application conditionally approved, subject to expected items.

"While interest rates are crucial," Ladher said, "the process itself is also a major factor, especially when clients are negotiating property purchases."

“We submit multiple applications every week and although we know the bank’s SLAs and submit accordingly, I have never had an approval come through so quick.”

Ladher said his experience with Macquarie Bank’s process is that they are quite commercial and take a common-sense approach.

“With the applicant still going through her due diligence on the property, we didn’t have a signed contract of sale. In some cases, a pre-assessment team would hold up and not progress to the credit assessor, slowing down the SLA,” Ladher said.

"The icing on the cake was that Macquarie Bank upfront valuation system approved the valuation to fo off the 'contract of sale', which was another item not to worry about and speeding upthe process." 

Robin Chakravarty, business development manager at Macquarie, appreciated the feedback.

“Here at Macquarie, we pride ourselves in delivering industry leading SLA. However, it is also the quality of the submission that also helps in delivering this service,” Chakravarty said.

Brown echoed this sentiment, saying the bank’s digital experience for brokers is supported by its BDM teams.

“We take a relationship-focused approach meaning our teams are committed to building deep, lasting and transparent connections with brokers – understanding their businesses and processes so that we can provide the best possible support and further enhance the experience our broker partners have when they engage with us,” Brown said.

Macquarie Bank gives brokers staff access to portal

Beyond its platform, Brown unveiled plans for brokers in 2024, emphasising increased efficiencies, digital control, and broker feedback-driven enhancements.

Brown highlighted the development of new features designed to "give our broker partners greater control and efficiencies," freeing them to focus on clients and business growth.

We have an always -on approach in terms of feedback and this informs the areas that we focus on and make improvements to,” Brown said.

“Whether that’s on our Broker Portal, our Help Centre or elsewhere across our digital experience, we’re proactive in understanding broker needs and designing enhancements that get to the heart of what they tell us they want most.”

Responding to broker requests, Macquarie Bank implemented support staff access to the Broker Portal.

“Brokers have told us that by giving support staff access to Broker Portal it would significantly improve how their business runs, so we have evolved our portal to include access for support teams which is driving meaningful efficiencies for broker businesses across Australia.”

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