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Speaker 1: Interesting insight into how we're handling our money. So we've

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Speaker 1: got a record number of US switching mortgage lenders, two

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Speaker 1: and a half billion dollars worth transacting in June alone.

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Speaker 1: David Cunningham's CEO scorel Mortgages.

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Speaker 2: Back with us morning, Good morning, Mike.

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Speaker 1: All the switching that's going on, is that a direct

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Speaker 1: result of competition. Banks are wanting to do deals and

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Speaker 1: get your money, if only sort of.

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Speaker 2: You know, banks use different tools like interest rates and

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Speaker 2: cash backs and things like that. Show and when your business,

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Speaker 2: it is a bit of a pass to pass of exercise.

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Speaker 2: You know, you move from one bank to the next,

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Speaker 2: and different customer moves from that bank to the other

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Speaker 2: one and sign So it's a bit of a pass

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Speaker 2: to parcel. It's sort of a way for It's a

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Speaker 2: more sort of a way Oligopoli's work. Actually, you know,

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Speaker 2: rather than pass on a lower interest rate to everyone,

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Speaker 2: they just for those that go searching for a cast

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Speaker 2: back by changing banks get good deals. So you know,

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Speaker 2: interest rates would be lower if we didn't have cast backs.

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Speaker 2: But it's a good way for banks to compete with

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Speaker 2: each other, seeming to compete with it really impacting their profits.

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Speaker 2: To be honest, all good for the customer. Sure takes

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Speaker 2: advantage of.

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Speaker 1: It if you're prepared to do it. So what are

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Speaker 1: we seeing in these numbers? So you've got zero point

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Speaker 1: three billion in new lending, which is up two billion

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Speaker 1: on last year, and I know this time last year

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Speaker 1: was soft. So you've got some new lending. There. Is

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Speaker 1: that good? Or are we just shuffling money round and

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Speaker 1: round in circles? No one's actually doing anything.

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Speaker 2: Well, no, I'm in the underlying profit property market back

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Speaker 2: to historical sort of trends. So you know, the underlying

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Speaker 2: turnover in the housing market is back to normal. You know,

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Speaker 2: we had that big boost post COVID and it's sort

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Speaker 2: of dropped massively and then it's sort of back to

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Speaker 2: normal trends. So what we're sort of seeing is a

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Speaker 2: somewhat elevated level of refinancing. I mean, and looking back

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Speaker 2: at Squirrels numbers, you know two years ago it was

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Speaker 2: thirty cent of their business was refinancing. It's thirty five

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Speaker 2: percent in the last six months. Well it's nothing extraordinary,

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Speaker 2: but it's one of those things. If you're not on

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Speaker 2: the boat, you're missing out.

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Speaker 1: Fair enough, and our investors in well, any Look, anyone.

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Speaker 2: With a mortgage that had a has a you know,

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Speaker 2: most people are new Zonder fixed rates. Anyone in the

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Speaker 2: mortgage that's that's got a fixed rate maturing, and there's

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Speaker 2: about forty percent of the market is on a fixed

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Speaker 2: or floating rate that's going to mature in the next

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Speaker 2: six months. So the first things talked to your bank,

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Speaker 2: talk to your broker, and you know, it's generally weird

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Speaker 2: estimate about a five hour process. And look, you can

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Speaker 2: typically get point eight to one percent cash back from

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Speaker 2: your bank if you switch banks. And that's really one

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Speaker 2: of the drivers here. So let's say you've got a

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Speaker 2: half million dollar mortgage percent four thousand, it's going to

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Speaker 2: cost you fifteen hundred dollars in legal fees and things

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Speaker 2: like that. So to enough thousand, five hours and the

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Speaker 2: brokers off, it's doing a lot of the work for you.

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Speaker 2: So five hundred bucks an hour, it's not a bad

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Speaker 2: return on investment day.

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Speaker 1: They're they're good numbers, though I not. Also there some

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Speaker 1: activity in the high debt to income people. Is that

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Speaker 1: is that a confidence thing or have they just been

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Speaker 1: waiting desperately for interest rates to come down? They can

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Speaker 1: lend a bit more, borrow a bit more rather and

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Speaker 1: then they're in.

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Speaker 2: Well that's pretty many first home buyers, a bit in

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Speaker 2: the investors space, but that's a pretty quiet part of

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Speaker 2: the market at the moment. So first home buyers typically

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Speaker 2: you know, high loan to value ratios to are borrowing

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Speaker 2: a lot with a smaller deposit and more of their

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Speaker 2: income is going to it. So it's picking up a

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Speaker 2: little bit. It's nothing like it was three or four

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Speaker 2: years ago during the boom of COVID, but you know,

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Speaker 2: first time buyers are always active in the market. It's

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Speaker 2: sort of a bit of a goldilocks time for first

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Speaker 2: home buyers. And interest rates have come down, banks are

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Speaker 2: willing to lend. Property prices are stable, if not sort

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Speaker 2: of falling. You know, you can pick and choose the

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Speaker 2: right property. You don't have to sort of make an

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Speaker 2: offer on the first place to see. So I've sort

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Speaker 2: of called it a bit of a goldilocks time for

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Speaker 2: first time buyers.

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Speaker 1: Good stuff, David appreciated David Cunningham out of Squirrel Mortgages.

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