An industry association has said finance brokers can benefit from a surprise hike in interest rates by Australia’s largest member-owned banks.
Last week, Credit Union Australia increased its rates by 25 basis points on 20 different variable P&I and interest only housing products.
Finance Brokers Association of Australia (FBAA) executive director Peter White said this presents an opportunity.
Data released by Canstar found that seven lenders increased rates in the week ending 20 August across more than 35 products with some lenders decreasing rates slightly on some loan products. In releasing the data Canstar said increases could soon be a way of life.
White said, “What makes these moves more interesting, and perhaps confusing for the consumer, are comments in the minutes of the monthly meeting of the Reserve Bank board after they held rates at 1.5% for a record 24th consecutive month.”
The board stated there was no strong case for an adjustment in monetary policy in the near term saying their current stance would “continue to support economic growth and allow further progress to be made in reducing the unemployment rate and returning inflation towards the midpoint of the target.”
White said the recent interest rates increases could raise questions among those people looking to secure certainty in their future loans strategy.
He added, “The level of distrust in our banks is at an all-time high and that has been heightened by the evidence given so far at the banking royal commission.
“Brokers have retained their positive reputation compared to banks, providing a valuable opportunity for the sector to increase its market share and provide tailored loan solutions to clients.”
He said there was no time like the present for brokers to demonstrate their professionalism, cut through the confusion of current interest rate fluctuations and deliver products that work for every individual.
“Interest rates can vary on a daily basis across many different loan products and it’s our job to stay on top of these market fluctuations so we can provide the best fit for clients,” he said, adding that there were many other factors besides interest rates that borrowers should consider.