Mortgage brokers need attention to detail

If you become a mortgage broker, part of your job will be helping everyday Australians find the home loan that suits their needs best. For many people, this will mean a mortgage that they can pay off quickly.

Those seeking mortgage broker careers should keep in mind that it’s this attention to detail and ability to secure the most suitable product for clients that separates brokers from traditional loan officers and gives them an edge.

Building a strong business as a mortgage broker is all about showing the value you can create for a customer, and finding a loan they can pay off more quickly is sometimes part of that.

Australians have historically been very good at paying off their home loans quickly, but this trend is starting to stagnate, according to a report from Fitch Ratings.

The global ratings agency recently reported that over the past 10 years, Australian residential mortgage-backed securities prepayment rates stood at between 15 per cent and 25 per cent. During March, the Fitch Dinkum Borrower Payment Rate Index reached 22.2 per cent.

While voluntary home loan repayments have risen since the global financial crisis, Fitch states it is a slight rise, with the average borrower only paying 1.5 per cent to 2 per cent more of their mortgage principal than they must each year.

‘The ideal Australian borrowers are far ahead of schedule is not really reflected for the average borrower. It’s true that some borrowers are ahead of schedule, but not all borrowers,” said James Zanesi, one of the authors of the report.

While there’s no law that says home loan borrowers need to be paying off their mortgages at a faster pace, one sign of an effective home loan is one that can be paid off quicker thanks to a low interest rate and favourable terms.