- Interest rates look set to stay low for many years
- The new 'Best Interests Duty' law now gives mortgage brokers a legal interest to act in the best interests of clients
- Clients will probably hunt around for the best deals, as aided by brokers
A year ago, it seemed the only direction interest rates were headed was up. But one of the few upsides to the upheaval of 2020 – for borrowers, at least – has been watching the cash rate plummet from 0.75 per cent to 0.1 per cent.
It’s expected to remain low for some time, with Reserve Bank Governor Philip Lowe saying yesterday he did not expect to increase the cash rate for at least three years.
This has already prompted many borrowers to refinance, but new ‘Best Interests Duty’ laws taking effect this month will give added impetus for home loan customers to look for a more competitive rate using a mortgage broker.
From 1 January 2021, mortgage brokers have a legal obligation – known as Best Interests Duty (BID) – to act in the best interests of clients when helping secure finance for home or personal loans or consumer asset finance.
It means mortgage brokers are now held to a higher standard than bank lenders, who only need to meet responsible lending obligations.
Enshrining BID in law means customers should have confidence going to a mortgage broker for finance.