Aussie mortgage brokers expect spending habits to be significantly transformed by forthcoming rate rises
Sydney, 31 October 2022: Mortgage brokers in Australia believe that rising interest rates will impact consumer spending habits more significantly than mortgage repayments and property costs, while the majority believe the RBA will raise the cash rate in November.
A new survey of mortgage brokers from leading Australian home loan marketplace Joust asked a range of questions regarding future cash rate rises both for November and over the next 12 months, as well as where we will see the biggest flow-on effects, and how recent changes have impacted their businesses.Off the back of inflation reaching 7.3% last week, its highest level since 1990, 100% of brokers agreed that spending habits will continue to change significantly over the coming months. The majority (75%) also believed that mortgage repayments will continue to be significantly impacted. Less brokers (12.5%) believed that the biggest changes would be seen in personal incomes and property investments, while 1 in 4 respondents suggested general property costs would see big flow-on impacts from future rate rises.
While the majority of brokers (87.5%) are predicting the RBA to raise the cash rate once again in November, there was less consensus around how high the rate will go over the next year. 50% suggested that the cash rate will rise by 4% or more over the next 12 months.
The survey also asked brokers to describe the impact of recent rate changes on their businesses, with the general sentiment unsurprisingly being that customers are more nervous and that brokers have seen a reduced number of home buyer inquiries, in favour of an increase in borrowers looking to refinance.
Joust CEO Carl Hammerschmidt said: “This month we wanted to get a sense check from our broker partners on their expectations for how the rising cash rate would impact the average consumer. Perhaps unsurprisingly given the manner in which Aussies are battling against rising living costs, spending habits for consumers was the only area that all our brokers agreed we’d continue to see big changes in the coming months.
“What’s interesting is that there are still a range of opinions on how high rates will go over the next year. We found there to be an even split of those who believe rates jump by at least 4% and those who think it won’t go up by more than than 3.5%. I wholeheartedly agree with the key sentiment coming out of the survey, with most brokers encouraging borrowers to focus on wise spending and to borrow with a bigger buffer than what a bank servicing calculator may allow.
About Joust:Joust is an online home loan marketplace that can help borrowers connect with the right lenders and brokers for their home loan needs. Through an open and transparent competitive process, Joust helps Australians uncover the most suitable home loan products and lowest rates based on their individual profile and needs, potentially saving them thousands.Its Live Auction service connects home loan customers directly with lenders and brokers who apply their best home loan rate to bid for the customer. In doing so, prospects are able to access the most competitive home loan rate. This reverse auction model saves borrowers time and money, and enables any lender to access customers fairly and on the same terms.Its Instant Match service allows Australians to save time by instantly accessing the top three (3) home loans suited to their needs (from thousands of different products). Through the Joust platform, customer submissions are immediately matched to lenders. The lender/s can then engage the customer to guide them through the home loan process.https://www.joust.com.au/