Guidance needed in ever-changing market
Incentives from lenders to refix or refinance a home loan are constantly changing, says an Auckland mortgage adviser.
The Mortgage Supply Co adviser, who was recognised as one of NZ Adviser’s Rising Stars for 2022, Jack Windler (pictured above) said the days of lenders luring prospective customers with televisions or holidays were long gone.
“Today we see high levels of change with interest rates and cashback incentives,” Windler said. “Lenders often are reviewing their portfolio and making pricing (interest rates and cashback) decisions to influence control over their market share. We have seen the ebb and flow on this throughout this year.”
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Windler said he could recall many recent examples of lenders offering different incentives in an attempt to secure new clients.
“One non-bank lender had a large drive of over 60% LVR investment lending and then soon after an influx of business, applied the handbrake with increased rates on the product and big decreases on owner occupied lending rates,” he said.
“Meanwhile New Zealand-owned Bank TSB returned with their famous matching of the big four rates in an effort to lead Kiwis towards them. One bank even went to 2% cashback on qualifying new-builds for the best part of the year, with the industry standard sitting around 0.70%.”
Windler said clients refix their mortgages for many reasons.
“I think it is always a good time to review this and then make a decision off the back of mutual understanding from a mortgage adviser,” he said. “What actions are taken depends on the needs of that client. Nobody has a crystal ball, but it is important to be well informed from market experts so mortgage holders can make their next decision with some confidence.”
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Windler said a mortgage adviser conducting a robust interview, following with ongoing lines of communication with clients had never been more important.
“By understanding clients’ current and future needs, this enables us to match that with the advice we give about lending structures and incentives that are considered, which adds as much value as possible,” he said. “Regardless of which lender is giving the ‘best deals’, approvability is still the critical consideration.”
Windler said a refinance with a client would not happen without effectively managing client expectations.
“This is so important in this stringent lending environment we are experiencing,” he said. “By knowing where the best deal is important but understanding how to get the best approval is a far greater asset for a mortgage adviser.”
