When you got your last loan, was it provided to you by someone working in your best interests or their own?
On January 1, 2021 the new Best Interests Duty comes into effect for mortgage brokers across the country. This change won’t affect anything at Urban, because we were always 100% on your side, but it does mean there will be a shake up in how you, the borrower, will be taken care of from an industry wide perspective.
You may not have realised, but as of right now and before, a broker could still sell you a loan that had the best commission. Sure, you’ll still be presented with a choice, but are they really selling you the one that’s in your best interests?
Similarly, it’s been similar to the responsibilities of a loan officer and bank – yes you need to pass your credit checks and affordability, but the type of finance was what THEY wanted to sell you, now what’s best for you.It was assumed a broker ALWAYS worked for the borrower, but that hasn’t and isn’t always the case. But with this new legislation, a mortgage broker must be acting in the best interests of the customer.
That’s a good thing and we welcome that clarity.
So for clarity, after January 1, 2021, it will be law that a broker must put your best interests first and provide you the credit product that best suits you. We’ve always done that and we go one better, looking at where you want to be in life, so that we get the right product for your life’s journey, not just that singular loan.
In contrast, even after January 1, a loan officer or bank can still sell you what’s right for them, not you.
Now for some brokers, this means they will have to work a bit harder for you, looking beyond comparing for the lowest interest rate, but actually comparing loan types and structures. Many mortgage and finance brokers will need upskilling to know finance in detail.
The great thing is, if this all sounds too confusing, at Urban Money you’ll see no change. We’ve always lived by what the Best Interest Duty requires and that means putting you first.
We’re 100% on your side.