The Reserve Bank’s decision to leave the official cash rate on hold for April was a win for the mortgage finance industry, believes a Sydney-based broker.
The RBA highlighted rising inflation and its impact on the Australian economy in Tuesday’s announcement.
Industry experts forecast a rate rise in the second half of the year, with the RBA stating it wants to see evidence inflation is sustainably within the 2% to 3% target range before it increases interest rates.
“We have seen a recent spike with the Ukrainian war, flooding up and down the east coast, supply issues and soaring petrol prices, so each of these factors will be considered by the Reserve Bank which they will continue to monitor,” said New Vision Financial Services managing director Chris Brown (pictured).
“All the talk and media coverage around these factors will encourage a lot of clients to contact a mortgage broker to ensure they are well placed getting the best deal.”
Read more: RBA remains firm on interest rates
Brown said the industry was experiencing lots of change from lenders amending fixed interest rates.
This resulted in more clients shopping around and locking in fixed rates and taking the refinance bonus some banks offered to secure new business.
“With the last rate increase over 11 years ago, many Australians have never experienced a rate rise, so this will be a shock for many people,” Brown said.
“Lenders are already factoring this in when making decisions with servicing buffers but for a lot of people this will not be any comfort to them. Even a small increase will shock Australians.”
Brown said he was seeing increased uncertainty from clients as a result of a challenging two-year period and an increase in the volume of clients contacting him looking to fix their rate for added certainty.
“Brokers are facing their own sets of challenges, despite global pressures and a pandemic, so when we look at the potential of rate rises and softening property prices it adds another set of challenges,” he said.
Brown said he understood how hard brokers worked for their clients, keeping their bests interests in mind at all times.
“We follow up post settlement, monitor their rates, but from time to time this happens,” he explained. “There will be an increasing challenge we will continue to see unfortunately. Just remember, with every change and challenge, comes opportunity.”
