Mark Stevenson
Mark is the Managing Director of Evolve Lending & Finance. Mark held senior roles in asset finance, consumer credit risk analysis, finance advisory and mortgage broking.
Front book or back book – what type of home loan do you have?
Front Book or Back Book: What Type of Home Loan Do You Have?
Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance) wrote for The Western Weekender on one of the less talked about but genuinely costly dynamics in the home loan market: the gap between front book and back book rates, and what borrowers can do about it.
The distinction is straightforward but the financial impact is anything but. Front book refers to customers a lender has recently acquired, while back book refers to those who have been with the bank for longer. Industry commentary at the time suggested the gap between these two groups could be as wide as 80 basis points, meaning loyal customers on older loans were potentially paying up to $4,000 more per year on a $500,000 loan compared to new borrowers being attracted with sharper rates.
Mark outlined the logic simply: lenders spend significantly to attract new customers, then rely on existing ones to subsidise those lower entry rates through inertia and inattention. His advice was practical and direct. Accept that the longer you stay with a lender without reviewing your rate, the higher the chance you are paying above the market average. Review your loan every two to three years. If your bank will not offer a better deal when asked, it is worth considering a move.
The article reflected one of the core roles a broker plays: not just placing a loan, but advocating on behalf of the client when it matters most. Mark noted that brokers carry weight when approaching a lender for a better deal, and if the lender still will not come to the party, a broker can help identify and facilitate a move to a more competitive option.
This piece highlights the ongoing value of having an experienced broker in your corner, someone who keeps an eye on the market so you do not end up quietly overpaying year after year.
Worried you might be on a back book rate? Contact Evolve Lending & Finance and find out if you could be getting a better deal.
