Navigating the lending environment has never been more complicated.
Interest rates remain elevated, with the prospect of further rate rises on the horizon. At the same time, persistent inflation and rising living costs are putting pressure on household budgets, while a nationwide housing shortage, a new federal budget and ongoing global uncertainty add further layers of complexity. Meanwhile, borrowers are faced with a crowded field of lenders all competing for their business.
Against this backdrop, it’s little surprise that demand for brokers continues to grow. Brokers settled a record 81.6% of new residential home loans in the most recent quarter, according to the Mortgage and Finance Association of Australia (MFAA).
Yet, the same conditions driving borrowers towards brokers are also making the profession more challenging. With greater complexity, more variables and a market that can shift quickly, finding the right lending solution requires more than simply matching a borrower with a lender. It's also made the job of being a broker increasingly challenging.
For Kimberly Linder, owner, director and finance broker at Xcel Finance, market turbulence is actually an opportunity for brokers to show what they're made of.
"Volatility is when the value of a good broker really becomes obvious," Linder told Australian Broker. "When everything is easy, almost anyone can get a deal done. When things become more complicated, that's when experience, relationships and the ability to think outside the box really matter."
For Australian Broker's latest Spotlight Series — where we highlight stand out professionals in Australia's finance and broking industries — we caught up once again with Linder, founder of the Sydney-based brokerage, to find out how she's navigating an increasingly complex lending environment, the lessons she's learned along the way and the trends she's watching most closely.
The following interview has been edited for grammar and clarity.
KL: I think the biggest thing during volatile times is not to get caught up in the noise. There will always be another headline, another interest rate decision or another global event that makes people nervous. As a broker, my job is to take some of that emotion out of the decision making process and help clients focus on what they can actually control.
Nobody really knows where interest rates or property prices are going to be. Instead, I help my clients understand their own position: what they can afford, what their borrowing capacity looks like and, importantly, whether they would still be comfortable if things didn’t go exactly to plan. My biggest advice to anyone looking to buy is don’t try to perfectly time the market. If you’re buying a home you’re going to live in, or investing with a long-term strategy, your personal circumstances and your ability to comfortably hold the property are much more important than trying to pick the exact bottom of the market, or the next interest rate move.
Our client base is heavily weighted towards investors, and many of them understand that property is a long game. They focus on time in the market rather than timing the market. That doesn't mean ignoring what's happening; it means not allowing short-term noise to dictate a long-term strategy.
I also think this is where brokers have to be really good at communicating. When markets are uncertain clients need more communication, not less. I want my clients to feel that they can call me, ask questions and get an honest answer, even if that answer is sometimes, 'I don't know, but let's work it out.'
And in terms of preparing brokers, I think it's about staying educated and staying close to your lender relationships. You need to understand changing credit policies, servicing models and what lenders are actually looking for, rather than relying on what worked six months ago. Ultimately, I think volatility is when the value of a good broker really becomes obvious. When everything is easy, almost anyone can get a deal done. When things become more complicated, that's when experience, relationships and the ability to think outside the box really matter. My approach is pretty simple: don't panic; don't pretend to know what the future holds. Understand your numbers and make decisions based on your own goals. And if we can do that, we can navigate pretty much whatever the market throws at us.
KL: I think one of the biggest things I do differently is that I don’t treat every client, or every deal, the same. I really take the time to understand what the client is trying to achieve, not just what they are asking for today. With clients, I listen. I ask lots of questions, and I try to understand the bigger picture, where they are now, where they want to be and what might be possible in the future. Sometimes the solution isn’t the most obvious one. So I’m always looking beyond the immediate transaction.
I'm also very proactive. I don't just lodge an application and hope for the best. I stay involved; I follow things up. I communicate with my clients and I keep looking for solutions if something doesn’t go to plan. I think clients really appreciate knowing that someone is genuinely in their corner.
With lenders, I think relationships are incredibly important. I make the effort to understand lender policy, what their appetite is, what they like and don’t like, and where there may be opportunities that aren’t immediately obvious. I don’t just look at a lender's rate and say, 'That’s the best option.' I look at the whole picture and work out which lender is actually the right fit for that particular client. And I’m not afraid to have the tough conversations. If something doesn’t quite fit, I’ll pick up the phone, explain the situation and see what can be done rather than simply accepting a no. I also think one of the things that sets me apart is that I’m prepared to do more, even when there isn’t necessarily a transaction attached to it. If I can help a client understand their position, improve their situation or put them in a better position for their next move, I’ll do that. Ultimately, I think the best practice is pretty simple: listen, be proactive, communicate and genuinely care about the outcome. I’m not trying to be the broker who does the most transactions. I want to be the broker who clients remember, and I think that’s where the real value is and why I have a large business.
KL: I think the biggest trend I’m seeing at the moment is that people are being much more strategic. There is definitely more caution around the market, and I’m seeing clients take a little longer to make decisions rather than jumping in.
With our client base being largely investors, something I’m hearing more and more from them following the recent tax changes is, 'I’m just going to hold.' A lot of our investors are taking a very long-term view and are questioning whether there is any real benefit in selling existing investments. The recent changes to negative gearing and capital gains tax have definitely made investors rethink their long-term strategy. It’s actually an interesting shift because rather than saying, 'I’m going to sell because the market is uncertain,' many are saying the opposite: 'Why would I sell? I’ll hold it, let the market do what it does and keep building.'
In terms of the types of loans we’re seeing, investment loans and construction loans are the largest part of our business. But I’m also seeing a lot of clients looking at refinancing and restructuring their existing loans. With borrowing capacity under pressure, people are looking at their existing debt and asking, 'Is this still the best structure for me?'
I'm also seeing clients being much more strategic about which lender they use and how they structure their loans. It’s less about simply chasing the lowest rate, and more about finding the right lender and structure for their particular circumstances. So for me, the big trend is less, 'I just want a loan,' and more 'I need a strategy.' And I actually think that’s where brokers add the most value right now. When the market is changing and the rules are changing, clients need someone who understands the bigger picture and can help them work through their options. Not just someone who can find them an interest rate.
