Rates fall - Lending appetite increases - Consumers win!
After what has been a tumultuous 18 months in banking and finance we are finally seeing the pendulum swing in favour of the consumer.
What has felt like a never ending cycle of static rates, increasing fees, ceased lending policy and constant review and inquiry from regulatory and government levels, the broking industry has come through with a new lease on life.
Unsurprisingly loans introduced by mortgage brokers have increased to over 60% of all lending applications during this time. This is a direct result of the very complex banking and finance market and the erosion of trust that came to light post the Banking Royal Commission.
That all said since the new financial year, it seems that the banks have decided one thing and that is to get on with business. They have recognised that a large part of their business is to actually lend money and in many cases they are throwing their support directly behind the Broker Channel than their own direct channels as the best way to attract new clients.
Some of the recent positive changes are:
• Relaxing of bank assessment rates - seeing people can borrow more from the bank on the same amount of income.
• Standardising of approach to living expenses - in very recent history each bank would have a different approach and standard when it came to living expense assessment, however lenders have appeared to fall in line with each other. Now looking at a client declared expenses against a common benchmark and then relying on client statement data to highlight any discrepancies. While this may seem like a lot of work (and it is), as all banks are adopting a similar standard there is less ambiguity for consumers and as brokers we can apply the same standard for all clients helping us provide more consistent recommendations.
• Competition is heating up - banks are fighting for your business and thus we are seeing some very competitive rates and refinance offers on the table and in a lot of cases special pricing to retain business than lost it to a competitor.
Overall these changes along with a light spring in the step of WA business confidence, we have seen a definite increase in the number of clients we have been able to help, improve their existing debt, purchase a new home or investment or expand their business.
Now is the right time before the rush of Christmas to review your lending. It is a free process and at worst you find out the deal you already have is the best that can be achieved and at best you can save on interest