September 2, 2025 • 23 mins
A remarkable 100,000 Australians refinanced their mortgage to a better rate in the three months to June this year. If you have yet to join the party, the pathway to lower mortgage costs is now clear, here's what to do...
Mortgage broker, Christian Stevens of the Flint group, joins Associate Editor - Wealth, James Kirby in this episode.
In today's show, we cover:
- How to cut your mortgage rate without moving banks
- Reducing mortgage rates by switching banks
- Long-term interest-only loans for experienced investors
- Spare Bedroom tax: You cannot be serious!
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Hello and welcome to the Australian's Money Pozzitle podcast. I'm
James Kirkby. Welcome aboard everybody. I'm guessing it's a very
good chance you have a mortgage at home or possibly
a mortgage on an investment property. You know that one
hundred thousand people refinanced their mortgages in the first quarter
of this year. That's more than one hundred a day,
(00:31):
and across rates are dropping, so it really is an opportunity,
so to take up that opportunity. My guest today is
Christian Stevens. He is a mortgage broker at the Flint Group.
He is the winner of the Mortgage Broker of the
Year three times. How are you Christian?
Speaker 2 (00:46):
Good? You heard me, James.
Speaker 1 (00:48):
Nice to have you on the show. They're big numbers.
Do people refinance more when rates are dropping? Is that
generally how it goes? Interesting questions? So it's a two
answer there.
Speaker 3 (01:01):
Definitely, when rates are in a cutting cycle, you'll find
lenders will pass.
Speaker 2 (01:08):
All or pour a portion of the loan on.
Speaker 3 (01:11):
What that means there's a bit of a discrepancy between
what lenders are providing. We're definitely seeing that after the
third rate cut that there's about a twenty twenty five
basis point difference between lenders depending on your needs an objective.
So there's been a probably forty percent increase in the
amount of clients looking to refinance this time last year.
(01:33):
I actually went through my entire backbook of clients and
repriced all of them and found that ninety percent of
them were already on probably the most competitive rate that
they could get, with lenders aggressively repricing in the retention
teams trying to keep those clients. Now, though definitely seeing
an opportunity for clients to refinance, which probably goes off
(01:55):
the back of what your comment was before. There's definitely
an increase of clients financing, reaching out about refinancing, di consolidating,
accessing equity.
Speaker 2 (02:04):
But yet there's a lot of moving in the market
at the moment.
Speaker 1 (02:08):
You see people will see that rates are coming down,
but they won't necessarily move immediately.
Speaker 4 (02:13):
But of course we've had two cuts.
Speaker 1 (02:14):
Now and there is it would seem at least one
more to come. There's two sort of areas that want
I told you about.
Speaker 4 (02:20):
One is trying to get.
Speaker 1 (02:21):
Your mortgage reduced from your existing financial institution without going
through the whole thing of moving, and then the second
part obviously is moving.
Speaker 4 (02:29):
But tell me, in terms of getting.
Speaker 1 (02:31):
A mortgage rate lowered by the bank you've been dealing
with beyond the power cuts that are coming through that
is that the links with the RBA is that feasible?
Is that our banks, when you say they have it's
nice to know, right, they have retention teams. To these
retention teams, if I was to call them and say
I'm just unhappy and they say, well, that's the rate,
and I say, well, I'm just unhappy with it, and
(02:51):
I feel like leaving, how would I improve that negotiation?
That have probably haven't sounded very good there and I
probably wouldn't sound good to the bank.
Speaker 4 (02:58):
You're the pro tell us what to do.
Speaker 3 (03:03):
There's a bit of a process, James. So each bank
has a def a different way that they will try
and retain clients. Some will offer your best rate immediately upfront.
Some you've got to go through a bit of a
journey to get that rate. So your broker, given that
you know eighty percent of loans are written through brokers,
most of your listeners would probably have got their loan
(03:24):
through a broken So what they should do is reach
out to the ask them to reprice their loan. And
there's a bit of a process there. So what they
will do is get your existing statement, look at your
loan to e ratios has the value with the property
as opposed to how much debt you have, and go
back to the bank and do a pricing. That pricing
would normally, you know, come back relatively competitive.
Speaker 2 (03:43):
They've got an option to escalate that pricing again. But
where you're going to see the biggest value is if
you do a bit of comparison.
Speaker 3 (03:49):
So if that broker go say if you're with you know,
aim Z, the broker will go and see what NAB
and CBA and Quarry and Westpac are offering, and then
go back to that lender and say, hey, I know
that you offered us five point seven, but all the
other banks are offering five point six? Can we please
match that? And that's where you can normally get that
(04:10):
little bit extra. What I was saying before is retention
teams are aggressively trying to keep clients. If you ask
me the same question years ago, and they couldn't really
care too much because there was so much business going around.
But these days the retention teams are actually quite competitive.
We're not seeing huge discrepancy between new tubank clients and
existing clients. Yes, there's always a bit of a difference
(04:32):
there called multi tax. You're always going to get a
better deal going to a new bank, but at the
same time, a relatively sharp rate with the lender you've
currently got, as long as you're broker is proactive and
getting on the front foot down and repricing that moment.
Speaker 1 (04:47):
What I read was when people of the one hundred
or so a day that refinanced one hundred thousand that
did so in the first quarter of the year, they
saved on average something close they said zero point eight percent.
So coming up on one and so people went in
the door, they may have had a rated six, and
they came out the door with the rate of five
points something. Is that that people should be looking for.
(05:07):
Is that a feasible target to take it down by
one of its six, it's five, its five, it's four.
Speaker 2 (05:13):
That's quite a lot.
Speaker 3 (05:16):
I think if you're getting more than point two or
point three off your loan, it's feasible because there's about.
Speaker 2 (05:21):
Eight hundred dollars to one thousand dollars depending on lender in.
Speaker 3 (05:24):
Exit costs and new costs associated with changing banks, and
also obviously time an effort. But anything less than that,
it doesn't really make a lot of sense to refinance any.
Speaker 2 (05:34):
More than that, then, yes, definitely you can save.
Speaker 3 (05:37):
I think Money magazine brought out a refinanced table or
a thousand clients that they that they looked into, and
I think the average saving was I think between seven
and nine thousand dollars for owly occupied or refinances annually
per property. So there's definitely some good deals to be
had now, which is why we're seeing such a big
increasing clients look good to refinance.
Speaker 4 (05:58):
Right.
Speaker 1 (05:58):
Okay, but before we talk about when you're prepared to
move banks, one other thing I want to ask you
is when you guys go in to renegotiate with the
bank and you know the language of the banks, which
I think is what's so important that most investors just
don't have either. Otherwise you can shave my costs of
my mortgage down Apart from the negotiation on the rate itself.
Speaker 2 (06:18):
Well not really.
Speaker 3 (06:19):
Some banks might waive at your fees and stuff like that,
but normally in those negotiations are made upfront. Outside of
that I think a better question we see a lot
of investors coming to us, is you know, interestrated to
bioproduct definding a lender that suits their needs and objectives.
Speaker 2 (06:38):
Especially when you comes to investment debt.
Speaker 3 (06:40):
How how a bank will assess your existing debt versus
new debt will determine how much you can borrow. A
lot of second tier lenders assess existing debt at a
much lower assessment rate, which means you can borrow a
lot more. So we're definitely saying, look, I guess j
if you ask me what my lender stack look like
(07:01):
when I started breaking ten years ago to now.
Speaker 2 (07:03):
It's much more diversified.
Speaker 3 (07:05):
Let people aren't, as you know, don't care as much
around going to just the big banks. We're seeing a
huge increase in second tier and non bank lending options
that loyal.
Speaker 4 (07:16):
They are all guaranteed bank. If it's a if it's a.
Speaker 3 (07:18):
Yeah, yeah, they're all safe, they're all the same, they're
all with the same banking and what they're obviously you
know a bit of convenience about having a bigger bank
and whatnot. But a person I can't remember last time
I went to the branch. Maybe I lost my debit card,
but it's not as common these days, which is why
you're seeing all these brands closing and everyone moving online.
Speaker 1 (07:35):
And the investors or the mortgage shoulders form mortgage sholders,
they too are much more winning.
Speaker 4 (07:41):
Are they to rule outside the Big four?
Speaker 3 (07:44):
Definitely, because I think when you're an investor, the opportunity
cost loss is far bigger than an interest rate change.
And what I mean by that is, if you're able
to get to the market sooner, ride that wave up
from a capital growth perspective, and you're paying an extra
twenty basis points, it's a drop in the ocean compared
to the amount of money you'd made on on knowing
that property. So I think investors especially are much more
(08:04):
open to the structure of a loan and the strategy
longed as opposed to the interest rate. Obviously, you want
the laws interest rate, but that is always a byproduct
defining a lender that since your needs and objectives, rather
than finding a lender that is offering a hook rate
or a honeymoon rate or something attractive upfront, but maybe
in the back end, their assessment rates are much higher
or their policies are much stricter, meaning you can't borrow
(08:25):
anywhere near what you'd like.
Speaker 4 (08:27):
Oh, yes, I see. Now tell me. So let's say,
am I in a more powerful position?
Speaker 1 (08:31):
Then when I go into the bank and I say
I'm what I'm immediately saying, I want to I'm looking around,
I'm prepared to leave you bank banker to go somewhere ast.
Am I immediately in a more powerful position? Then if
I'm serious about that?
Speaker 2 (08:45):
Look, I think there's ways of being serious.
Speaker 3 (08:47):
If if the broker has done their research and is
going back to the bank with competitor analysis around what
else is available to their clients, that tells me that
they're serious and they're genuinely looking at other options.
Speaker 1 (08:59):
If you're just saying, look, that's not far from you
can see, I'm a really bad negotiator.
Speaker 3 (09:03):
I need you, which is which is why I've got
retention teams, right, So you know at some point you're
going to end up in that retention team, and then
that's their job to kind of retain you off the
back of understanding how seriously while that you believe.
Speaker 4 (09:15):
What scares them, what makes them worry? Oh, this is
going to go.
Speaker 3 (09:21):
I guess I know where this question is probably going
is would you put a discharge in to kind of.
Speaker 2 (09:27):
Make them feel like you're going to leave.
Speaker 3 (09:29):
Definitely, putting a discharge in you're going to get a
caught from someone at the bank.
Speaker 2 (09:33):
There are certainly.
Speaker 3 (09:35):
Lenders who would look at a discharge requests more seriously
than others, but each bank has a very different process
of how that they go through that discharge process.
Speaker 1 (09:44):
So one of our regular guests, Weams, believes they're very
powerful that if you request a discharge authority get action.
Speaker 4 (09:50):
Is he on the money?
Speaker 3 (09:53):
Look, there's definitely lenders that would see that, but normally
from the hundreds and hundreds of reprices we would do
a week, rarely not able to get the same results
as long as you structure it and present it properly. Today,
if I didn't do the work up front right then yes,
it would same results.
Speaker 2 (10:08):
But also there's a time cost.
Speaker 3 (10:10):
Their James in going and filling out his charge and
going to that effort where you could just do it
up front with your broker anyway.
Speaker 1 (10:15):
Okay, so this is a power of information, very interesting.
All right, we'll come back in a moment, folks. I
want Christian to tell us about the something of the
myth shall we say, around the best rates, the advertised
rate on the window is not always the cheapest. That's
what'th thinking about. Back in a moment. Hello, Welcome back
(10:41):
to The Australian's Money Puzzle podcast. I'm James Kirby talking
to Christian Stevens the first time on the show. We
do have been in communication. Of course, Christian I quite
a bit in the work I do, but we haven't
had him on the show before.
Speaker 4 (10:53):
Nice to have him on. He is a top mortgage.
Speaker 1 (10:56):
Broker and he is going to tell us in this
segment about why the lowest advertise rate isn't always the cheapest.
I would have thought I would go on to my
comparison site, I would see the lowest raets and I
would really hang onto that pretty tightly. Yeah, what am
I missing?
Speaker 2 (11:11):
Interest rate?
Speaker 3 (11:12):
The byproduct of finding a lender suits your needs and objectives.
Often if you go on like Comparisonite, like Finder or equivalent,
definitely see some lenders there offering ridiculously low interest rates.
But what you don't see is in the background there
the way that they assess your debt.
Speaker 2 (11:30):
So often the lowest interest.
Speaker 3 (11:32):
Rates or those lenders non bank lenders that are offering
rates that look almost too good to be true.
Speaker 2 (11:37):
Their policies are.
Speaker 3 (11:38):
Very restrictive, so they only want very low, low intervalue
ratio deals that are very which exactly is in a
large portion of the population, right so, and also the
other way they assess your debt will be a lot strictest,
so nowhere near as much as you'd like. And there's
definitely a segment of the market that would suit. But
for most people, especially proper developers investor sorry, who are
(12:00):
looking to grow a portfolio that is going to be restrictive.
Do you actually being able to achieve that? And you
can still get very sharp, very competitive interest rates by
going to dozens and dozens of first, second, and thirty
lenders that offer rates that are pretty sharp and still
get you the result that you need on the back
end as well.
Speaker 1 (12:19):
So we were talking in the first segment about that
there might be ways beyond just the rate that you
can get a better deal than the headline rate. And
the headline rate, as you say, you've used the phrase
more than once already on the show. They think that
it's the byproduct as such, So tell me you say
brokes can save investors money beyond the headline rates. Where
(12:40):
are those areas that you can sive? That's what I'm
interested in. Are there fees hidden costs?
Speaker 2 (12:46):
I think it's a bigger question, James. So when you
want to think of a property investor, it's more around
how do you structure a deal? How do you get
me from A to B.
Speaker 3 (12:54):
As quick as possible, chieap as possible. And that definitely
comes down to structuring debt. That comes down to interest
only terms as opposed to principal interests, utilizing of office accounts.
But it's more around how do you borrow efficiently?
Speaker 2 (13:12):
You know, there's ways, not gainer systems.
Speaker 3 (13:15):
Probably the wrong words to use, but lenders have different
ways and they access assess sorry your existing debt versus
your new debt. So say you know one of the
bigger banks, they will assess your existing debt at three
percent and your new debt at three percent. Some of
the second and thirty lenders will assess your existing debt
at one percent or one a half percent, which means
(13:36):
you can borrow a lot more on the front. So
under you're broker having deep understanding of how assessment rates work,
what policies different lenders are providing, will allow you to
grow a property portfolio a lot faster and more efficiently.
And I think as a property investor, being able to
capitalize quickly on opportunities is really important.
Speaker 1 (13:58):
So there's considerable veryation is there on these assessment rates
and there yeah, because they only have to report to
Apple their averages.
Speaker 5 (14:05):
Is that it same clients, same income, same deal, and
we're talking about one hundred of thousands, is what millions
of dollars difference in borrowing capacity depending on their levels,
But definitely the two biggest movers of borrowing capacities your
non based income, so the way that a bank will
assess you know, over time or bonuses or shares, and
your existence as well, so.
Speaker 2 (14:25):
You can get a massive discrepancy between.
Speaker 3 (14:27):
Lenders and a good broker enables you to capitalize us
that on those opportunities and kind of show you how
to work your way through all the different lender policy
because if we're talking about one hundred lenders thousands of
different policies, it's a mindfiit, right, there's a lot of
information there.
Speaker 1 (14:41):
And you say about the non base income, it's interesting
we've had over the year's lots of complaints from listeners
about that. The older investors often who don't have a salary,
can hit a real brick wall in trying to get mortgage,
even if they're considerable wealth and income.
Speaker 3 (14:57):
Definitely not having if you're only income is coming from
rental income. Yes, it's hard, right because the way the
bank says that if that intenant you can't find a
tenant or something happens, there's no real buffer there.
Speaker 2 (15:08):
So cliss I that it comes down to what's called
an exit strategy James.
Speaker 3 (15:11):
So as long as they've got you know, a low
loan to value ratio, a lot of money in a
super maybe some diversification and other assets, and you can
prove to the bank that look worst case scenario as
a four back strategy. Here you can normally get around
issues like that, but yeah, it definitely gets harder for
professional investors who own the income is rental income because
they don't have a fall back there, or they.
Speaker 1 (15:30):
Just have investment income. And how do you get just briefly, like,
how do you get around that? The person says, well,
you know, my forum says you must have a salary.
You don't have a salary, and you say, yes, but
I'm earning quite a big income per animate just isn't
a suny is that?
Speaker 4 (15:44):
How do you get around that?
Speaker 2 (15:48):
I would do a couple of things.
Speaker 3 (15:49):
One is you look at your super balances and other
assets to see what that will look like in terms
of a.
Speaker 2 (15:53):
Timeframe of someone's life.
Speaker 3 (15:54):
If they're at sixty or fifty five years old, you know,
what does their retirement agy will look like?
Speaker 2 (15:57):
And then when are they going to start drawing a pension?
Speaker 3 (15:59):
And what to sell down straight And they might have
you know, one, two, three, four, five, ten investment properties.
I would presume that retirement would mean that they'd sell
a couple of those properties. So what you do is
a good broker, is you put together a one page
a strategy around what that exit, what that downsize is
actually going to look like, and as long as it
all makes sense. At the end of the day, banks
(16:19):
buses and they're more than happy to learn money, but
they also don't want to lend money to someone who
they think there's going to be an issue.
Speaker 2 (16:26):
But you can normally get around them.
Speaker 1 (16:27):
So there will they will they will think, yeah, beyond
the district.
Speaker 3 (16:32):
And there's also you know, there's also some lenders that
look at you know, older clients more favorably.
Speaker 2 (16:37):
There's a year interest only loans and some unique niche
products that have come to market recently.
Speaker 3 (16:43):
Because you look at the population, right, James, it's pretty aging,
and you know there needs to be an understanding that
there are going to be products that are going to
suit different segments of the market and rational investors over there.
To fifty five is definitely one of them.
Speaker 4 (17:00):
Right.
Speaker 1 (17:00):
Okay, just one last thing on that before we go
to questions. Did you I am varying from what you
say that the bank's actually the interest only was something
that they were willing to give older investors over younger ones.
Speaker 2 (17:16):
It's not favorable in terms of age.
Speaker 3 (17:18):
What I'm saying is that there's definitely been an increase
in interest only products coming to market for professional investors.
Speaker 2 (17:25):
Okay, there without a doubt.
Speaker 3 (17:27):
Right, So because you know you typically had the two,
ye three, four, five year interest only facilities and then
having to refinance five years, it doesn't make a lot
of sense for.
Speaker 2 (17:37):
Isn't There's some products out there that have extended interest
only terms for this exact scenario.
Speaker 1 (17:42):
So they're bringing in ones now that have decade long
interest only and you know that before you start.
Speaker 4 (17:47):
Yeah, okay, very interesting. All right, look, well take a
short break books.
Speaker 1 (17:50):
I think we really picked up a few pieces of
very valuable information.
Speaker 4 (17:55):
There a couple of things that I might just recap.
Speaker 1 (17:57):
One of the negot we negotiate with your own bank,
that is entirely feasible. As Christian says, keep you know,
it's a matter of presenting accurate information to them of
the comparisons outside. The discharge authority is always there, of
course as a.
Speaker 4 (18:12):
Weapon as such.
Speaker 1 (18:13):
That is that you are you are seeking to leave
the bank, and you will need a mortgage discharge authority,
and that is something the attention teams. There are words
they do not like to hear. Also interesting on the
professional or at least the investment property side. For the
property investor, there has always been a strong theory that
why would you pay principal ever as an investor and
(18:34):
you could be in interest only And the think about
interest only is up to now Christian it was sort
of in and out of fashion, it seems to me
at the banks, depending on what was going on. But
interesting to hear there is a structural long term interest
only deals out there for the right investor. Okay, very good,
gouts some great questions back in a moment. Hello, welcome
(19:01):
back to The Australian's Money Puzzle podcast.
Speaker 4 (19:03):
I'm James Kirkby.
Speaker 1 (19:04):
I'm talking to Christian Stevens of the Flint Group. He
is a mortgage broker.
Speaker 4 (19:09):
Kelly has a question you've mentioned.
Speaker 1 (19:11):
I kept this question for you, Christian. Kelly says you've
mentioned more than once on the show. The most important
words in getting a better deal on your mortgage something
to do with the mortgage discharge. Can you explain it please, Yes,
I can, Kelly. It probably goes back to a piece
I wrote some times ago about the magic words, the
magic words forgetting a mortgage, which were at the time. Christian,
(19:33):
I am considering signing a discharge authority.
Speaker 4 (19:38):
So you you don't deny that it works. You're you
just say, actually, you might even have to go that far,
give work and do it.
Speaker 3 (19:44):
You can get the same outcom without doing that certain Yeah,
it's an extreme response to what can definitely be done
while you broke up without the need to go and
go and do that. And the banks might want to say,
you know, thousands of this charge requests going in because
you can get the same result easily.
Speaker 1 (20:01):
Okay, yes, and you did actually cover that in the
first segment. All right, now, Alex, I have seen many articles,
says Alex, recently from less reputable publications, writing about a
proposed spare bedroom tax. Could you talk about the proposal,
the likelihood of it being implemented or is it just
scare bongering? Okay, none of this is advice, is always information,
(20:22):
and Alex, look, it's nothing to do with reputable or
not being reputable.
Speaker 4 (20:27):
There is a cautality of all people.
Speaker 1 (20:30):
Cautality being the former Cologic group, and we often have
Eliza Owens and Tim Lawless either both economists from that group,
on the show, and they in their proposal to the
Economic Summit, their submission had a spare bedroom taxes, an
idea of basically a stick if you like to get
people bring around their big family homes in the suburbs
(20:51):
to downsize.
Speaker 4 (20:53):
As an idea. It all it got was all I saw.
It got no support whatsoever. All I saw was critician
and complained what do you think of a Christian? The No.
Speaker 2 (21:02):
Thirty first thing? I know Eliza and Tim well and
have nothing but respect for him. But that is a
that is almost impossible to police.
Speaker 3 (21:08):
Really, I think taxing people on having a spare bedroom
when they're already paying rates and whatnot seems quite unfair. Interestingly,
if I put some personal context to your question. This morning,
almost morning to go for a walk with my wife,
there are three properties on our walk that we go
to that are empty, and they've been empty for several years.
(21:29):
That's where I think there needs to be some action.
If someone has an empty property, then you know you
should be taxed high on the on that property. I
think taxing people for the spare bedroom is absurd, but
there should definitely be some more incentives to downsize. I
think you can get threehundred thousand and or six one
thousands of a couple, do you super tax free when you downsized.
Speaker 2 (21:49):
There's not enough incentive to downsize. That's the problem, right.
Speaker 3 (21:52):
And if you think of the population, thirty percent have
a mortgage or thirty three percent, thirty percent rant, and
thirty percent a debt free.
Speaker 2 (22:00):
We're going to see a huge.
Speaker 3 (22:01):
Transfer of wealth over the next five to ten years.
There's not enough incentive to downsize, and I think there
needs to be a lot more thought as to how
to make that attractive for old restrains.
Speaker 2 (22:14):
So they want to do that. But IFITELY think tax
on spare bedrooms is not the answer.
Speaker 4 (22:18):
No, I think it's going to get up.
Speaker 1 (22:19):
Shane Oliver, another regular guest on the show, Chief Economy
the Day and P, said that the guiding principle of
getting people to as you say, in incentivizing people to
get out of their big houses, for perhaps there is
spare bedrooms, our bedrooms that are not used much and downsize,
is to suspend.
Speaker 4 (22:38):
One idea would be suspend stamp.
Speaker 1 (22:40):
Duty for downsizers in that area, or certainly incentives at
least to get people.
Speaker 4 (22:44):
I don't think the stick will work.
Speaker 1 (22:46):
And what would you have, as you say, police, would
you have someone sort of helicopter over the suburbs, you know,
unmanageable and not particularly feasible. I think you're right all right,
terrific and really good to have you on the show.
Thank you very much, Christian on a very acute observations
from someone who I had a guest if he was
on the show, would be quite accurate and concise in
(23:08):
his answers because he is a busy man. All right,
Thank you very much, Christian of the Flinch group. We'll
talk again for having me and keep the emails rolling.
Folks the money puzzle at the Australian dot com dot au.
Speaker 4 (23:21):
Talk to you soon.
Hello and welcome to the Australian's Money Pozzitle podcast. I'm
James Kirkby. Welcome aboard everybody. I'm guessing it's a very
good chance you have a mortgage at home or possibly
a mortgage on an investment property. You know that one
hundred thousand people refinanced their mortgages in the first quarter
of this year. That's more than one hundred a day,
(00:31):
and across rates are dropping, so it really is an opportunity,
so to take up that opportunity. My guest today is
Christian Stevens. He is a mortgage broker at the Flint Group.
He is the winner of the Mortgage Broker of the
Year three times. How are you Christian?
Speaker 2 (00:46):
Good? You heard me, James.
Speaker 1 (00:48):
Nice to have you on the show. They're big numbers.
Do people refinance more when rates are dropping? Is that
generally how it goes? Interesting questions? So it's a two
answer there.
Speaker 3 (01:01):
Definitely, when rates are in a cutting cycle, you'll find
lenders will pass.
Speaker 2 (01:08):
All or pour a portion of the loan on.
Speaker 3 (01:11):
What that means there's a bit of a discrepancy between
what lenders are providing. We're definitely seeing that after the
third rate cut that there's about a twenty twenty five
basis point difference between lenders depending on your needs an objective.
So there's been a probably forty percent increase in the
amount of clients looking to refinance this time last year.
(01:33):
I actually went through my entire backbook of clients and
repriced all of them and found that ninety percent of
them were already on probably the most competitive rate that
they could get, with lenders aggressively repricing in the retention
teams trying to keep those clients. Now, though definitely seeing
an opportunity for clients to refinance, which probably goes off
(01:55):
the back of what your comment was before. There's definitely
an increase of clients financing, reaching out about refinancing, di consolidating,
accessing equity.
Speaker 2 (02:04):
But yet there's a lot of moving in the market
at the moment.
Speaker 1 (02:08):
You see people will see that rates are coming down,
but they won't necessarily move immediately.
Speaker 4 (02:13):
But of course we've had two cuts.
Speaker 1 (02:14):
Now and there is it would seem at least one
more to come. There's two sort of areas that want
I told you about.
Speaker 4 (02:20):
One is trying to get.
Speaker 1 (02:21):
Your mortgage reduced from your existing financial institution without going
through the whole thing of moving, and then the second
part obviously is moving.
Speaker 4 (02:29):
But tell me, in terms of getting.
Speaker 1 (02:31):
A mortgage rate lowered by the bank you've been dealing
with beyond the power cuts that are coming through that
is that the links with the RBA is that feasible?
Is that our banks, when you say they have it's
nice to know, right, they have retention teams. To these
retention teams, if I was to call them and say
I'm just unhappy and they say, well, that's the rate,
and I say, well, I'm just unhappy with it, and
(02:51):
I feel like leaving, how would I improve that negotiation?
That have probably haven't sounded very good there and I
probably wouldn't sound good to the bank.
Speaker 4 (02:58):
You're the pro tell us what to do.
Speaker 3 (03:03):
There's a bit of a process, James. So each bank
has a def a different way that they will try
and retain clients. Some will offer your best rate immediately upfront.
Some you've got to go through a bit of a
journey to get that rate. So your broker, given that
you know eighty percent of loans are written through brokers,
most of your listeners would probably have got their loan
(03:24):
through a broken So what they should do is reach
out to the ask them to reprice their loan. And
there's a bit of a process there. So what they
will do is get your existing statement, look at your
loan to e ratios has the value with the property
as opposed to how much debt you have, and go
back to the bank and do a pricing. That pricing
would normally, you know, come back relatively competitive.
Speaker 2 (03:43):
They've got an option to escalate that pricing again. But
where you're going to see the biggest value is if
you do a bit of comparison.
Speaker 3 (03:49):
So if that broker go say if you're with you know,
aim Z, the broker will go and see what NAB
and CBA and Quarry and Westpac are offering, and then
go back to that lender and say, hey, I know
that you offered us five point seven, but all the
other banks are offering five point six? Can we please
match that? And that's where you can normally get that
(04:10):
little bit extra. What I was saying before is retention
teams are aggressively trying to keep clients. If you ask
me the same question years ago, and they couldn't really
care too much because there was so much business going around.
But these days the retention teams are actually quite competitive.
We're not seeing huge discrepancy between new tubank clients and
existing clients. Yes, there's always a bit of a difference
(04:32):
there called multi tax. You're always going to get a
better deal going to a new bank, but at the
same time, a relatively sharp rate with the lender you've
currently got, as long as you're broker is proactive and
getting on the front foot down and repricing that moment.
Speaker 1 (04:47):
What I read was when people of the one hundred
or so a day that refinanced one hundred thousand that
did so in the first quarter of the year, they
saved on average something close they said zero point eight percent.
So coming up on one and so people went in
the door, they may have had a rated six, and
they came out the door with the rate of five
points something. Is that that people should be looking for.
(05:07):
Is that a feasible target to take it down by
one of its six, it's five, its five, it's four.
Speaker 2 (05:13):
That's quite a lot.
Speaker 3 (05:16):
I think if you're getting more than point two or
point three off your loan, it's feasible because there's about.
Speaker 2 (05:21):
Eight hundred dollars to one thousand dollars depending on lender in.
Speaker 3 (05:24):
Exit costs and new costs associated with changing banks, and
also obviously time an effort. But anything less than that,
it doesn't really make a lot of sense to refinance any.
Speaker 2 (05:34):
More than that, then, yes, definitely you can save.
Speaker 3 (05:37):
I think Money magazine brought out a refinanced table or
a thousand clients that they that they looked into, and
I think the average saving was I think between seven
and nine thousand dollars for owly occupied or refinances annually
per property. So there's definitely some good deals to be
had now, which is why we're seeing such a big
increasing clients look good to refinance.
Speaker 4 (05:58):
Right.
Speaker 1 (05:58):
Okay, but before we talk about when you're prepared to
move banks, one other thing I want to ask you
is when you guys go in to renegotiate with the
bank and you know the language of the banks, which
I think is what's so important that most investors just
don't have either. Otherwise you can shave my costs of
my mortgage down Apart from the negotiation on the rate itself.
Speaker 2 (06:18):
Well not really.
Speaker 3 (06:19):
Some banks might waive at your fees and stuff like that,
but normally in those negotiations are made upfront. Outside of
that I think a better question we see a lot
of investors coming to us, is you know, interestrated to
bioproduct definding a lender that suits their needs and objectives.
Speaker 2 (06:38):
Especially when you comes to investment debt.
Speaker 3 (06:40):
How how a bank will assess your existing debt versus
new debt will determine how much you can borrow. A
lot of second tier lenders assess existing debt at a
much lower assessment rate, which means you can borrow a
lot more. So we're definitely saying, look, I guess j
if you ask me what my lender stack look like
(07:01):
when I started breaking ten years ago to now.
Speaker 2 (07:03):
It's much more diversified.
Speaker 3 (07:05):
Let people aren't, as you know, don't care as much
around going to just the big banks. We're seeing a
huge increase in second tier and non bank lending options
that loyal.
Speaker 4 (07:16):
They are all guaranteed bank. If it's a if it's a.
Speaker 3 (07:18):
Yeah, yeah, they're all safe, they're all the same, they're
all with the same banking and what they're obviously you
know a bit of convenience about having a bigger bank
and whatnot. But a person I can't remember last time
I went to the branch. Maybe I lost my debit card,
but it's not as common these days, which is why
you're seeing all these brands closing and everyone moving online.
Speaker 1 (07:35):
And the investors or the mortgage shoulders form mortgage sholders,
they too are much more winning.
Speaker 4 (07:41):
Are they to rule outside the Big four?
Speaker 3 (07:44):
Definitely, because I think when you're an investor, the opportunity
cost loss is far bigger than an interest rate change.
And what I mean by that is, if you're able
to get to the market sooner, ride that wave up
from a capital growth perspective, and you're paying an extra
twenty basis points, it's a drop in the ocean compared
to the amount of money you'd made on on knowing
that property. So I think investors especially are much more
(08:04):
open to the structure of a loan and the strategy
longed as opposed to the interest rate. Obviously, you want
the laws interest rate, but that is always a byproduct
defining a lender that since your needs and objectives, rather
than finding a lender that is offering a hook rate
or a honeymoon rate or something attractive upfront, but maybe
in the back end, their assessment rates are much higher
or their policies are much stricter, meaning you can't borrow
(08:25):
anywhere near what you'd like.
Speaker 4 (08:27):
Oh, yes, I see. Now tell me. So let's say,
am I in a more powerful position?
Speaker 1 (08:31):
Then when I go into the bank and I say
I'm what I'm immediately saying, I want to I'm looking around,
I'm prepared to leave you bank banker to go somewhere ast.
Am I immediately in a more powerful position? Then if
I'm serious about that?
Speaker 2 (08:45):
Look, I think there's ways of being serious.
Speaker 3 (08:47):
If if the broker has done their research and is
going back to the bank with competitor analysis around what
else is available to their clients, that tells me that
they're serious and they're genuinely looking at other options.
Speaker 1 (08:59):
If you're just saying, look, that's not far from you
can see, I'm a really bad negotiator.
Speaker 3 (09:03):
I need you, which is which is why I've got
retention teams, right, So you know at some point you're
going to end up in that retention team, and then
that's their job to kind of retain you off the
back of understanding how seriously while that you believe.
Speaker 4 (09:15):
What scares them, what makes them worry? Oh, this is
going to go.
Speaker 3 (09:21):
I guess I know where this question is probably going
is would you put a discharge in to kind of.
Speaker 2 (09:27):
Make them feel like you're going to leave.
Speaker 3 (09:29):
Definitely, putting a discharge in you're going to get a
caught from someone at the bank.
Speaker 2 (09:33):
There are certainly.
Speaker 3 (09:35):
Lenders who would look at a discharge requests more seriously
than others, but each bank has a very different process
of how that they go through that discharge process.
Speaker 1 (09:44):
So one of our regular guests, Weams, believes they're very
powerful that if you request a discharge authority get action.
Speaker 4 (09:50):
Is he on the money?
Speaker 3 (09:53):
Look, there's definitely lenders that would see that, but normally
from the hundreds and hundreds of reprices we would do
a week, rarely not able to get the same results
as long as you structure it and present it properly. Today,
if I didn't do the work up front right then yes,
it would same results.
Speaker 2 (10:08):
But also there's a time cost.
Speaker 3 (10:10):
Their James in going and filling out his charge and
going to that effort where you could just do it
up front with your broker anyway.
Speaker 1 (10:15):
Okay, so this is a power of information, very interesting.
All right, we'll come back in a moment, folks. I
want Christian to tell us about the something of the
myth shall we say, around the best rates, the advertised
rate on the window is not always the cheapest. That's
what'th thinking about. Back in a moment. Hello, Welcome back
(10:41):
to The Australian's Money Puzzle podcast. I'm James Kirby talking
to Christian Stevens the first time on the show. We
do have been in communication. Of course, Christian I quite
a bit in the work I do, but we haven't
had him on the show before.
Speaker 4 (10:53):
Nice to have him on. He is a top mortgage.
Speaker 1 (10:56):
Broker and he is going to tell us in this
segment about why the lowest advertise rate isn't always the cheapest.
I would have thought I would go on to my
comparison site, I would see the lowest raets and I
would really hang onto that pretty tightly. Yeah, what am
I missing?
Speaker 2 (11:11):
Interest rate?
Speaker 3 (11:12):
The byproduct of finding a lender suits your needs and objectives.
Often if you go on like Comparisonite, like Finder or equivalent,
definitely see some lenders there offering ridiculously low interest rates.
But what you don't see is in the background there
the way that they assess your debt.
Speaker 2 (11:30):
So often the lowest interest.
Speaker 3 (11:32):
Rates or those lenders non bank lenders that are offering
rates that look almost too good to be true.
Speaker 2 (11:37):
Their policies are.
Speaker 3 (11:38):
Very restrictive, so they only want very low, low intervalue
ratio deals that are very which exactly is in a
large portion of the population, right so, and also the
other way they assess your debt will be a lot strictest,
so nowhere near as much as you'd like. And there's
definitely a segment of the market that would suit. But
for most people, especially proper developers investor sorry, who are
(12:00):
looking to grow a portfolio that is going to be restrictive.
Do you actually being able to achieve that? And you
can still get very sharp, very competitive interest rates by
going to dozens and dozens of first, second, and thirty
lenders that offer rates that are pretty sharp and still
get you the result that you need on the back
end as well.
Speaker 1 (12:19):
So we were talking in the first segment about that
there might be ways beyond just the rate that you
can get a better deal than the headline rate. And
the headline rate, as you say, you've used the phrase
more than once already on the show. They think that
it's the byproduct as such, So tell me you say
brokes can save investors money beyond the headline rates. Where
(12:40):
are those areas that you can sive? That's what I'm
interested in. Are there fees hidden costs?
Speaker 2 (12:46):
I think it's a bigger question, James. So when you
want to think of a property investor, it's more around
how do you structure a deal? How do you get
me from A to B.
Speaker 3 (12:54):
As quick as possible, chieap as possible. And that definitely
comes down to structuring debt. That comes down to interest
only terms as opposed to principal interests, utilizing of office accounts.
But it's more around how do you borrow efficiently?
Speaker 2 (13:12):
You know, there's ways, not gainer systems.
Speaker 3 (13:15):
Probably the wrong words to use, but lenders have different
ways and they access assess sorry your existing debt versus
your new debt. So say you know one of the
bigger banks, they will assess your existing debt at three
percent and your new debt at three percent. Some of
the second and thirty lenders will assess your existing debt
at one percent or one a half percent, which means
(13:36):
you can borrow a lot more on the front. So
under you're broker having deep understanding of how assessment rates work,
what policies different lenders are providing, will allow you to
grow a property portfolio a lot faster and more efficiently.
And I think as a property investor, being able to
capitalize quickly on opportunities is really important.
Speaker 1 (13:58):
So there's considerable veryation is there on these assessment rates
and there yeah, because they only have to report to
Apple their averages.
Speaker 5 (14:05):
Is that it same clients, same income, same deal, and
we're talking about one hundred of thousands, is what millions
of dollars difference in borrowing capacity depending on their levels,
But definitely the two biggest movers of borrowing capacities your
non based income, so the way that a bank will
assess you know, over time or bonuses or shares, and
your existence as well, so.
Speaker 2 (14:25):
You can get a massive discrepancy between.
Speaker 3 (14:27):
Lenders and a good broker enables you to capitalize us
that on those opportunities and kind of show you how
to work your way through all the different lender policy
because if we're talking about one hundred lenders thousands of
different policies, it's a mindfiit, right, there's a lot of
information there.
Speaker 1 (14:41):
And you say about the non base income, it's interesting
we've had over the year's lots of complaints from listeners
about that. The older investors often who don't have a salary,
can hit a real brick wall in trying to get mortgage,
even if they're considerable wealth and income.
Speaker 3 (14:57):
Definitely not having if you're only income is coming from
rental income. Yes, it's hard, right because the way the
bank says that if that intenant you can't find a
tenant or something happens, there's no real buffer there.
Speaker 2 (15:08):
So cliss I that it comes down to what's called
an exit strategy James.
Speaker 3 (15:11):
So as long as they've got you know, a low
loan to value ratio, a lot of money in a
super maybe some diversification and other assets, and you can
prove to the bank that look worst case scenario as
a four back strategy. Here you can normally get around
issues like that, but yeah, it definitely gets harder for
professional investors who own the income is rental income because
they don't have a fall back there, or they.
Speaker 1 (15:30):
Just have investment income. And how do you get just briefly, like,
how do you get around that? The person says, well,
you know, my forum says you must have a salary.
You don't have a salary, and you say, yes, but
I'm earning quite a big income per animate just isn't
a suny is that?
Speaker 4 (15:44):
How do you get around that?
Speaker 2 (15:48):
I would do a couple of things.
Speaker 3 (15:49):
One is you look at your super balances and other
assets to see what that will look like in terms
of a.
Speaker 2 (15:53):
Timeframe of someone's life.
Speaker 3 (15:54):
If they're at sixty or fifty five years old, you know,
what does their retirement agy will look like?
Speaker 2 (15:57):
And then when are they going to start drawing a pension?
Speaker 3 (15:59):
And what to sell down straight And they might have
you know, one, two, three, four, five, ten investment properties.
I would presume that retirement would mean that they'd sell
a couple of those properties. So what you do is
a good broker, is you put together a one page
a strategy around what that exit, what that downsize is
actually going to look like, and as long as it
all makes sense. At the end of the day, banks
(16:19):
buses and they're more than happy to learn money, but
they also don't want to lend money to someone who
they think there's going to be an issue.
Speaker 2 (16:26):
But you can normally get around them.
Speaker 1 (16:27):
So there will they will they will think, yeah, beyond
the district.
Speaker 3 (16:32):
And there's also you know, there's also some lenders that
look at you know, older clients more favorably.
Speaker 2 (16:37):
There's a year interest only loans and some unique niche
products that have come to market recently.
Speaker 3 (16:43):
Because you look at the population, right, James, it's pretty aging,
and you know there needs to be an understanding that
there are going to be products that are going to
suit different segments of the market and rational investors over there.
To fifty five is definitely one of them.
Speaker 4 (17:00):
Right.
Speaker 1 (17:00):
Okay, just one last thing on that before we go
to questions. Did you I am varying from what you
say that the bank's actually the interest only was something
that they were willing to give older investors over younger ones.
Speaker 2 (17:16):
It's not favorable in terms of age.
Speaker 3 (17:18):
What I'm saying is that there's definitely been an increase
in interest only products coming to market for professional investors.
Speaker 2 (17:25):
Okay, there without a doubt.
Speaker 3 (17:27):
Right, So because you know you typically had the two,
ye three, four, five year interest only facilities and then
having to refinance five years, it doesn't make a lot
of sense for.
Speaker 2 (17:37):
Isn't There's some products out there that have extended interest
only terms for this exact scenario.
Speaker 1 (17:42):
So they're bringing in ones now that have decade long
interest only and you know that before you start.
Speaker 4 (17:47):
Yeah, okay, very interesting. All right, look, well take a
short break books.
Speaker 1 (17:50):
I think we really picked up a few pieces of
very valuable information.
Speaker 4 (17:55):
There a couple of things that I might just recap.
Speaker 1 (17:57):
One of the negot we negotiate with your own bank,
that is entirely feasible. As Christian says, keep you know,
it's a matter of presenting accurate information to them of
the comparisons outside. The discharge authority is always there, of
course as a.
Speaker 4 (18:12):
Weapon as such.
Speaker 1 (18:13):
That is that you are you are seeking to leave
the bank, and you will need a mortgage discharge authority,
and that is something the attention teams. There are words
they do not like to hear. Also interesting on the
professional or at least the investment property side. For the
property investor, there has always been a strong theory that
why would you pay principal ever as an investor and
(18:34):
you could be in interest only And the think about
interest only is up to now Christian it was sort
of in and out of fashion, it seems to me
at the banks, depending on what was going on. But
interesting to hear there is a structural long term interest
only deals out there for the right investor. Okay, very good,
gouts some great questions back in a moment. Hello, welcome
(19:01):
back to The Australian's Money Puzzle podcast.
Speaker 4 (19:03):
I'm James Kirkby.
Speaker 1 (19:04):
I'm talking to Christian Stevens of the Flint Group. He
is a mortgage broker.
Speaker 4 (19:09):
Kelly has a question you've mentioned.
Speaker 1 (19:11):
I kept this question for you, Christian. Kelly says you've
mentioned more than once on the show. The most important
words in getting a better deal on your mortgage something
to do with the mortgage discharge. Can you explain it please, Yes,
I can, Kelly. It probably goes back to a piece
I wrote some times ago about the magic words, the
magic words forgetting a mortgage, which were at the time. Christian,
(19:33):
I am considering signing a discharge authority.
Speaker 4 (19:38):
So you you don't deny that it works. You're you
just say, actually, you might even have to go that far,
give work and do it.
Speaker 3 (19:44):
You can get the same outcom without doing that certain Yeah,
it's an extreme response to what can definitely be done
while you broke up without the need to go and
go and do that. And the banks might want to say,
you know, thousands of this charge requests going in because
you can get the same result easily.
Speaker 1 (20:01):
Okay, yes, and you did actually cover that in the
first segment. All right, now, Alex, I have seen many articles,
says Alex, recently from less reputable publications, writing about a
proposed spare bedroom tax. Could you talk about the proposal,
the likelihood of it being implemented or is it just
scare bongering? Okay, none of this is advice, is always information,
(20:22):
and Alex, look, it's nothing to do with reputable or
not being reputable.
Speaker 4 (20:27):
There is a cautality of all people.
Speaker 1 (20:30):
Cautality being the former Cologic group, and we often have
Eliza Owens and Tim Lawless either both economists from that group,
on the show, and they in their proposal to the
Economic Summit, their submission had a spare bedroom taxes, an
idea of basically a stick if you like to get
people bring around their big family homes in the suburbs
(20:51):
to downsize.
Speaker 4 (20:53):
As an idea. It all it got was all I saw.
It got no support whatsoever. All I saw was critician
and complained what do you think of a Christian? The No.
Speaker 2 (21:02):
Thirty first thing? I know Eliza and Tim well and
have nothing but respect for him. But that is a
that is almost impossible to police.
Speaker 3 (21:08):
Really, I think taxing people on having a spare bedroom
when they're already paying rates and whatnot seems quite unfair. Interestingly,
if I put some personal context to your question. This morning,
almost morning to go for a walk with my wife,
there are three properties on our walk that we go
to that are empty, and they've been empty for several years.
(21:29):
That's where I think there needs to be some action.
If someone has an empty property, then you know you
should be taxed high on the on that property. I
think taxing people for the spare bedroom is absurd, but
there should definitely be some more incentives to downsize. I
think you can get threehundred thousand and or six one
thousands of a couple, do you super tax free when you downsized.
Speaker 2 (21:49):
There's not enough incentive to downsize. That's the problem, right.
Speaker 3 (21:52):
And if you think of the population, thirty percent have
a mortgage or thirty three percent, thirty percent rant, and
thirty percent a debt free.
Speaker 2 (22:00):
We're going to see a huge.
Speaker 3 (22:01):
Transfer of wealth over the next five to ten years.
There's not enough incentive to downsize, and I think there
needs to be a lot more thought as to how
to make that attractive for old restrains.
Speaker 2 (22:14):
So they want to do that. But IFITELY think tax
on spare bedrooms is not the answer.
Speaker 4 (22:18):
No, I think it's going to get up.
Speaker 1 (22:19):
Shane Oliver, another regular guest on the show, Chief Economy
the Day and P, said that the guiding principle of
getting people to as you say, in incentivizing people to
get out of their big houses, for perhaps there is
spare bedrooms, our bedrooms that are not used much and downsize,
is to suspend.
Speaker 4 (22:38):
One idea would be suspend stamp.
Speaker 1 (22:40):
Duty for downsizers in that area, or certainly incentives at
least to get people.
Speaker 4 (22:44):
I don't think the stick will work.
Speaker 1 (22:46):
And what would you have, as you say, police, would
you have someone sort of helicopter over the suburbs, you know,
unmanageable and not particularly feasible. I think you're right all right,
terrific and really good to have you on the show.
Thank you very much, Christian on a very acute observations
from someone who I had a guest if he was
on the show, would be quite accurate and concise in
(23:08):
his answers because he is a busy man. All right,
Thank you very much, Christian of the Flinch group. We'll
talk again for having me and keep the emails rolling.
Folks the money puzzle at the Australian dot com dot au.
Speaker 4 (23:21):
Talk to you soon.
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