Having culturally and linguistically diverse clients could give mortgage brokers the edge, according to new research by brokerage Resolve Finance, especially in an environment where advice is crucial.
The research found the majority of homeowners (70%) with English as a second language (ESL) plan to use a mortgage broker when refinancing after their current fixed rate mortgage ends.
This surpasses the 55% of native English speakers who will engage a broker to navigate the “fixed rate cliff” borrowing landscape.
A further 45% of native English speakers intend to refinance without a broker, instead opting to DIY when their fixed rate mortgage ends, compared to 30% of ESL homeowners.
Victorian-based Resolve Finance broker Niti Bhargava (pictured above left) said empathy and patience was key to overcoming language or cultural barriers when serving homeowners from different communities.
After moving from India 15 years ago, Bhargava said that while she drew on her own experience as a migrant, any broker could effectively help clients from a diverse range of backgrounds.
“Buying a home is confusing for people who already live here and speak English. Imagine how it must feel for these people who face a new environment, new language, new banking processes,” Bhargava said.
“But before I go into any of the technical stuff, I make it a point to understand their background first. Once you can connect with each other over culture, language, and values, it’s very easy to build trust.”
Don Crellin (pictured above right), managing director of Resolve Finance, said language barriers should never hinder indviduals from accessing the information and support they needed to make informed financial decisions.
“This is a unique point in time where we have an unprecedented number of borrowers on fixed rate details who will soon be migrated to steeper variable rates,” Crellin said. “Brokers have an important role to play helping borrowers navigate the mortgage landscape.”
Homeowners with English as a second language account for around 12% of mortgage holders – or 700,000 people – in Australia, according to Mozo.
As a result, Crellin said that Resolve Finance had made it a point to hire multilingual brokers such as Bhargava to bridge the gap and ensure that all borrowers can benefit from clear communication and cultural understanding.
But even though she can fluently speak Hindi, Punjabi, and Urdu, Bhargava has made it a point to educate anyone who has migrated to Australia.
“Nowadays most of my clients are migrants and many are from Europe,” she said.
Bhargava told Australian Broker about one client’s custom of having tea and biscuits from the dining room floor. “There was no chair or tables, but I didn’t want to project myself as the odd one out,” she said.
Instead, Bhargava said they chatted about life and family and found that relatable human connection, and she still is their mortgage broker six years on.
“They understood that I respected their customs and values. It’s just all about finding that common ground with someone even when you may not understand or agree on everything,” she said.
As the Australian government’s Permanent Migration Program increases its intake to 195,000 placements in the 2023 financial year, up from 160,000 in the previous financial year, brokers who can overcome cultural and language barriers could have the edge.
With many borrowers already concerned about the impending mortgage cliff, Crellin said it would become even more important for brokers to be on the front foot and make clients aware of all the options.
“This includes helping those who plan to stay their current lender negotiate to achieve the best possible terms. For all borrowers, the cost of inaction is too great,” said Crellin.
