Brokers can help investor clients through rate and policy turmoil, writes the managing director of Finsure and 1300HomeLoan
More moves by the banking regulators to try and drive investors out of the property market simply represent another opportunity for mortgage brokers to demonstrate their value and find solutions.The big four banks and even some smaller lenders have responded to APRA’s focus on investors by raising their interest rates and tightening eligibility criteria.
But investors aren’t going to go away. At 1300HomeLoan, we have seen a 30% increase in enquiries from investors in the March quarter of 2017 compared to the same period last year. The reality is that people – whether they be those looking to boost their retirement nest egg or first-time buyers trying to get a leg-up on the property ladder – will always view property investment as a viable option.
The current focus on investors is another chance for brokers to show their expertise and boost their ever-increasing share of the home finance market. Given the huge amount of volatility around out of cycle interest rates by banks and a multitude of changes to lender policies for investor loans, investors are turning more and more to brokers.
"At 1300HomeLoan, we have seen a 30% increase in enquiries from investors in the March quarter of 2017"
In most cases it is to find a more competitive interest rate and in some instances simply to find a lender who has a home loan solution for investors having difficulty meeting the lending criteria. Many of these customers have never used a broker before and a large proportion were loyal to their existing lender.
However, out of cycle rate hikes of 25-30 basis points has left many clients disillusioned with their existing lenders and they are turning to brokers in droves for a solution. We are not really seeing the rate changes and other factors dampening demand from investors, however, we are seeing them question if their current home loan is the most competitive option.
The last few years have been a confusing time for the lending market despite the RBA’s official rate being at historically record lows. The lending landscape has become a minefield in particular for investors and it’s playing into the hands of brokers to help them navigate through all the challenges.
John Kolenda is the co-founder and managing director of aggregator Finsure and 1300HomeLoan. BRW Magazine included Finsure in its Fast 100 list of most rapidly growing companies in 2015 and 2016. John has also founded the Aura Group, a boutique corporate advisory and investment house, with over $150m in assets under management.