Kiwibank now have Google/Apple pay, so you're out of excuses for banking with the Aussies.

[marcyhoney]

@in_jesus_i_trust But if a bank just offered the same rate to you when you walked in you would still change and they wouldn't have to pay a broker, they basically force you to use a broker by making that the only way to get the best rates when that is the most expensive form of customer acquisition

 

[in_jesus_i_trust]

@marcyhoney Brokers exist in so many industries from insurance, real estate, employment, material acquisition, contracts, etc etc etc, billions and billions of money exchanged in commissions globally. You're arguing that all of those brokers are pointless as well basically for the same reasons, party A and B can just talk to each other without needing a middleman - and yet all major companies out there use brokers for a reason?

 

[marcyhoney]

@in_jesus_i_trust I'm not actually, in arguing that mortgage brokers are pointless when dealing with a large bank. I can walk into a branch of any of the big banks to talk to them and ask for their best rate on a mortgage. A broker could provide value to me in that I only need to talk to one person but 5 banks + smaller banks and credit unions or offer expertise. In a lot of those other situations the brokers provide industry specific knowledge to get a deal across the line. It's not that I just hate brokers I just think I should be able to walk into a bank and get the same deal that they can when it actually costs the bank less

 

[wedinn]

@hope3 Maybe It's more me than my bank but I'm on 2.99% till late 2025 and didn't get charged break fees for an early repayment on another tranche this week.

 

[runako]

@wedinn Why would you expect to be charged a break fee? Rates are obviously much higher now than when you fixed and they’re only charged when the bank is due to make a loss on your early repayment; it’s not just some random fee charged because they’re mean and nasty.

I don’t think anyone should be listening to your financial advice anyhow, as the smarter thing to do in your case would’ve been to throw that money into a six-point-something-percent term deposit for a year, earn the extra three-percent interest above what you’re paying on the mortgage then put it in the loan next year. Maybe if you had a broker he might’ve suggested that to you?

 

[wedinn]

@runako Lack of details sorry...

I paid down a 7% tranche and avoided 18 months of interest on it, you'd need a guaranteed 10.5% return to beat that.

I'm of course not going to break my 2.99, nor are all my eggs in one basket. Did your broker think 5 years under 3% was a good play?

 

[runako]

@wedinn Okay in that case, fair enough. How did you end up with the seven-percenter to begin with—I assume it must have been fairly recently?

And yeah 5 years @ 2.99% is decent, if fairly standard, all the big banks were offering that no questions asked when the pandemic hit.

 

[wedinn]

@runako A two year fix last year was the ~7%

Yep everybody was under 3%, but were brokers recommending it? Some of my mates use brokers and they all played short.
- It's only my experience of having a mortgage that made me think a big 5 year tranche under 3% was a solid move, and the brokers should be the most experienced players in the game.

 

[praen4you]

@wedinn Why wouldn't you think that fixing long term at 3% wouldn't be a good idea, that's basically a free loan at those rates. Downside is what it goes to 2%, upside 8-20% it's like shorting, there's a limit to how low something can go (0) but no limit on upside.

Banks/brokers were basically lying to people since they get fees when people engage in their services to refix and they didn't want to offer such low rates for long periods

 

[gabrieltheworshipper]

@wedinn Kiwibank seem pretty strict

Makes sense since they’re competing with bigger banks and can’t take as much risk

 

[jackk123]

@wedinn It really isn't feasable to go through all your coffee purchases with seven different lenders.

(the whole normative credit checking process has been backfiring on banks, when they lend to a person with an overly frugal lifestyle and find they have nothing to cut down on when circumstances change)

 

[prphan2]

@wedinn Kiwi bank doesn’t have much capacity and is very tight range of parameters for lending. If you want anything vaguely non-standard they simply won’t touch it so they just aren’t an option for me at all

 

[elizabethcall]

@wedinn That’s not true at all. Brokers are a game changer. The banks love them and the clients love them. It’s literally a win win which is pretty rare in the business world. They do all the dirty work for the client, normally met at much more convenient times than the banks are open, then they make sure all the information is sorted before going to the bank, so they don’t have to waste their time trying to explain how to fill in all the information. They do get a kick back from where ever they go, and they normally do have a few banks they prefer to work for, but they are worth their weight in gold for a first home buyer.

 

[shiningstar]

@wedinn While not untrue at the core, brokers will often get you the better rates and do the leg work to find it.

Certainly have a look yourself but banks/bankers will often give brokers better rates (even taking into account commissions etc) as brokers bring through a lot of business. Brokers also take a lot of the hard work out of applications for the bank, so it's a very mutually beneficially relationship.

 

[psalm24]

@wedinn Then banks should offer the rates they give via brokers directly to customers and cut them out. Instead they are happy to fund brokers via advantageous rates and percentage back.

 

[stuh]

@wedinn Without broker I'd be paying over 8%. Got 6.79% with a 7% deposit at another bank via broker.

 

[in_jesus_i_trust]

@wedinn Everybody is in it to make money for themselves. You think people work for free?

Brokers have proven time again they can at least beat the bank's best offering and usually get you better rates than the bank will offer. There's literally no downside to getting an offer from the bank and comparing it to the offer from the broker.

The only actual legitimate negative to using a broker is they have 2-3 preferred banks they work with and the absolute best market rate could theoretically be from a bank they don't deal with, but these days banks aren't really in the business of competing with one another except for maybe a few basis points here or there, and hitting 2 of the major aussie banks is almost certainly going to land you a best deal. Don't just look at carded rates online to make this analysis, talk to the other banks to get their best offers.

It sounds like you've never actually used a broker for some unfound fear or misconception.

Reading all your comments here it seems you've gone with 1 bank for 17 years, never swapped banks to see what others offer or what their services are like, and now you're an expert on every single bank out there? And have convinced yourself you're on better rates than other banks without actually looking at what other banks are offering??

 

[wedinn]

@in_jesus_i_trust I'm not an "expert", have had a mortgage for 10 of the ~17 years, & didn't realise brokers would be part of the discussion. It makes sense that they are though as they seem to funnel customers around the place.

My point, and the only reason I posted is:
- If all else is equal, we should try to keep profits local.

I'm sure brokers are good at collating quotes and are more comfortable talking to banks than most people so must be good conduits, but they're still middlemen not mates.

My only genuine reference point for their effectiveness is comparing notes with mates who do use brokers (always "really nice" people). My anecdotal evidence suggests I've done pretty well batting for myself to make sure I'm a low margin customer.

 

[stephanieann]

@wedinn Out of excuses? I'd say poor service is a pretty good reason. I'm a bit of a bank whore and Kiwibank service pales in comparison in my experience. They don't do banking as well as the big players. I'm all for supporting local but they need to up their game to the level of the others

 

[wedinn]

@stephanieann I've heard "service" mentioned a few times & I don't know what I don't know, but I've never had a negative experience with Kiwibank. I value value more than I value fluff with my money services.

What services are so good?