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The major bank has said that brokers play “an important role” in supporting customers in the current environment.
The Commonwealth Bank of Australia’s executive general manager of home buying, Dr Michael Baumann, has highlighted that while many borrowers are already preparing for rising rates, there are a range of tools and offers that “customers may not be aware of”.
As such, he said this “highlights the important role lenders and brokers play in supporting customers in the current environment”.
“We also encourage customers to speak with us about how we can support them via our extensive network of lenders and brokers,” he said.
Mr Baumann’s comments come after CBA released research showing that the vast majority of Australian home owners have taken steps to mitigate the impact of rising mortgage rates before the Reserve Bank of Australia (RBA) announced a cash rate increase in May.
The findings were collated from a House of Brand Group survey of 1,072 respondents (419 of whom had a home loan) conducted between 16 and 21 April.
It found that 92 per cent of Australian home owners had already taken steps to mitigate the impact of rising mortgage rates.
For example, among the 385 home owners who said they had taken action, close to half (47 per cent) had reduced their living costs, 42 per cent had built up their savings, and almost two-fifths (38 per cent) said they had been making additional repayments on their home loan to get ahead.
The research also found that 37 per cent of Australians have been putting money into their offset/redraw account and a third (33 per cent) have been looking for cheaper providers for utilities/services.
Mr Baumann said: “We know that one in two CommBank customers are more than three months ahead of their home loan repayments and it’s encouraging that the majority of Australian homeowners are taking proactive steps to continue to improve their financial position with rates expected to continue to increase over the next 12-18 months.”
The data echoed analysis from ANZ chief executive Shayne Elliott, who recently noted that consumers’ savings are at record levels, saying “people are well prepared” for rising rates. Similarly, the RBA has found that home owners had built up their cash buffers as a “side effect” of surging house prices.
However, recent comments from APRA chair Wayne Byres have flagged that lenders may soon start seeing increasing losses from home loan portfolios as some borrowers suffer “sizeable repayment shock”.
Moreover, a recent survey of 1,000 Australians from Mortgage Choice has shown that borrowers are concerned with how they will manage higher repayments.
It found that 31 per cent of borrowers are losing sleep about interest rate rise, with those who have recently purchased their first home and Sydneysiders being the most concerned about rate rises, followed by those living in Melbourne, Adelaide and Perth.
Around 17 per cent of mortgage holders indicated that they would be concerned if home loan interest rates grew by just 1 per cent, while 48 per cent expressed concerns around a 2 per cent ascent.
One in two survey respondents said they could afford to pay an extra $201 a month and only 33 per cent of borrowers could afford to pay an additional $401 or more per month.
David Zammit, national sales director at Mortgage Choice, commented at the time: “In this environment, it is important borrowers are informed so they’re not overpaying.
“Given how complex the lending landscape is with hundreds of products in the market it is near impossible for borrowers to know whether they have a good rate unless they use the expertise of a broker who has this information at their fingertips.”
Labor politicians have also flagged the important role of brokers as rates increase – with Stephen Jones MP (formerly the shadow financial services minister and shadow assistant treasurer) telling The Adviser in February of this year that he wants “brokers to be 100 per cent focused on ensuring that everyone on their books has access to the best-priced mortgage at a time when we know mortgage rates are going to go up and cost living pressures are huge”.