The devil is often in the detail

The Devil Is Often in the Detail

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance) wrote for The Western Weekender to highlight a pattern he was seeing in the market: banks making offers to existing mortgage customers that appeared attractive at first glance but did not hold up under scrutiny.

With mortgage brokers accounting for nearly two thirds of all home loan settlements nationally, banks had been responding by attempting to retain existing customers directly, either with special offers through their apps and internet banking platforms or by making the broker process slower and more frustrating. The issue Mark raised was that these direct offers were not always as generous as they appeared.

He described a real client situation to make the point concrete. A borrower coming off a fixed rate was offered a seemingly straightforward choice by their lender: re-fix through the app or roll onto a variable rate with a quoted discount off the standard variable rate. It looked simple and reasonable. But when Mark’s team examined the details, the discount being offered through the bank’s direct channel was 1.32 per cent, while through the broker portal they were able to secure an instant rate approval of 1.90 per cent. On top of that, the fixed rate quotes the bank had provided were based on an LVR of 80 per cent, when the client’s actual LVR was under 60 per cent, which qualified them for materially lower rates than those presented.

The takeaway was not that banks are acting dishonestly, but that customers who engage directly without an advocate do not always get the best outcome available to them. Brokers exist precisely because they have access to information and levers that individual customers do not.

The reason brokers have grown their share of the home loan market over decades is simple: they actually help customers save money. Contact Evolve Lending & Finance before accepting any offer from your lender.