Mark Bouris: Mortgage brokers can help you get the best interest rate deal

Your bank isn’t going to tell you if you’ve got the best deal out there when it comes to interest rates, Mark Bouris writes. Now is the time go and see a broker. I’m not telling you to go and see one of the brokers who works for me, jut any broker who can help you navigate a process that has never been so complicated.

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You can’t have missed the outrage storming across Australia this week over which banks and moneylenders have chosen not to pass on the most recent interest rate cut in full.

This is a conversation we shouldn’t even be having. Banks are under no legal obligation to mirror the RBA’s rate cuts or increases, although that used to be the convention.

They haven’t been since 2008, when Labor Treasurer Wayne Swan acquiesced to Australian banks uncoupling from the RBA’s interest rate decisions.

Banks don’t need to pass interest rate cuts in full, Mark Bouris says.

Before that, when the RBA reduced or increased the official rate, the banks moved pretty much within days to reduce or increase the retail interest rate by the same amount.

As a result of this uncoupling, I have never seen the lending landscape more confusing and difficult to understand as it is right now. Banks change their rates all the time, and it’s so hard to keep up with the multiplicity of products.

The changes of 2008 have placed the burden of understanding those products right at your door: “Am I getting the best deal?”

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It’s never as simple as a lender’s advertised rate, either. A lower rate looks great on paper, but you can find yourself worse off if the savings are eaten up — and then some — by fees and charges.

Now is the time go and see a broker. I’m not telling you to go and see one of the brokers who works for me — I mean any broker who can help you navigate a process that has never been so complicated.

Yellow Brick Road executive chairman Mark Bouris said homeowners should shop around for a good interest rate deal. Picture: Hollie Adams

Your bank isn’t going to tell you if you’ve got the best deal out there. Your bank manager likely won’t know the finer details of what other lenders are currently offering. And even if they did, why would they tell you?

They’re employed by one bank and one bank only. Don’t get me wrong; I’m not happy with the change in convention that has allowed some banks to not pass on the rate cut.

For one, it nullifies one of the only weapons the RBA has to ward off what is, according to some commentators, looking more and more like a looming recession.

I don’t subscribe to that view at this stage, because I think the current bad data the RBA is reacting to is a direct result of all the negativity round Labor’s election campaign, and I think that if anyone can navigate us through these global headwinds, it’s the Coalition.

But the change in convention also means mortgage holders across Australia could find themselves paying more than they have to in interest.

But remember your rights in this; just as the banks have the right to change rates as they will, you have the right to get the very best deal you can. The power, then, is actually all yours.

* Mark Bouris, chairman of Yellow Brick Road, is one of Australia’s most successful entrepreneurs