Broking firm challenges the market
An Auckland-based mortgage broking firm has just significantly undercut the market with a one-year fixed rate of 6.45%.
Thursday, June 28th 2001, 10:22AM
by Jenny Ruth
Mortgage broker and financial planning firm Millennium Financial Services, based on Auckland’s North Shore, is currently offering one-year fixed mortgages at 6.45%. The rate applies only to residential loans with a minimum loan size of $40,000.
That’s about 25 basis points lower than its nearest competitors are offering for the same fixed period. And it comes with other benefits such as no set up fees.
Millennium managing director Michael Morrison says within 24 hours of the company advertising its rate in the New Zealand Herald the firm had received "well into the millions" of dollars worth or enquiries.
He says the funding is sourced from one of the banks, but won’t say which one.
The reason Millennium can offer such a low rate is its reputation with that particular bank, he says. His company ranks top among mortgage brokers with that bank in terms of the number of loan applications submitted which are approved.
"We’re quite a bit higher than the next best," Morrison says.
Some mortgage brokers only get about half the loans they submit to banks approved, he says.
Millennium opened its doors in March 1997 and "we’ve spent the last five years earning the ability to get those benefits." This is the first time it’s advertised.
Achieving a high success rate is a matter of doing the job properly and preparing a comprehensive financial plan for every client, regardless of the mortgage product used, he says.
His company works with all the banks in New Zealand and when it restructures clients’ loans it’s usually with their own banks.
Morrison sees developing a good rapport with all the banks as crucial to his business. He headed a bank charity project about 18 months ago which earned the firm both kudos and tangible benefits in the form of deals not normally available to mortgage brokers, he says.
The average saving Millennium has been able to achieve per client is $89,000, he says.
Morrison would like to see the mortgage
broking industry exercise a greater degree of self-regulation.
"The quality of the industry is of concern to the banks."
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