As interest rates rise, so too does the mortgage broker workload. Educating and supporting borrowers on how best to navigate the changing economic environment places extra time pressures on already time-poor brokers.
Equifax asked Peter White, Managing Director of the Finance Broker Association of Australia (FBAA), how mortgage brokers keep up with this increased need to work proactively with clients. He spoke about the importance of technology for improving processes and freeing up time for client servicing.
Valuable client conversations
Related to the question how mortgage brokers are getting involved in helping clients to cope and preparing them for more interest rate rises and inflationary pressures to come, White said: that mortgage “brokers have been extremely active” and that “there has been a whole host of things happening in the marketplace” that they have done “to assist borrowers with where they are now and in preparation for what to come”.
“You’ve got a whole lot of borrowers fixed on cheap interest rates, but when they step out of that rate, there will be a big differential in their repayments,” he said. “So there’s a lot of conversations and education happening between brokers and their clients about the actions they can take now to soften this blow.”
He said brokers are reaching out to clients to ask whether they are travelling okay and whether their loan product still meets their needs in these turbulent times. “Many borrowers have never been in this situation before, so brokers are spending a lot of time caring for and managing these borrowers.”
How technology is driving broker market share
With mortgage broker market share reaching an all-time high of 69.5% in Q3 20221, it’s evident that brokers are busier than ever. White believes we’ll see the broker’s share of the market rise even further in coming years, thanks to technology’s ability to take on the grunt work.
He explains that technology adoption is driven by consumer demand for faster, more convenient processes. “Brokers are adopting technology into their practices to help them save time and do business better. So as long as we continue giving consumers what they want – good service and speed of turnaround for approval and settlement – our market share will continue to rise.”
Source: Equifax Australia news