17 Apr Shop your bank – Siobhan Hayden
It is still amazing how many property investors and property buyers don’t see the benefits of shopping around when borrowing money for a property purchase or even to refinance an existing loan. It is now so easy to shop around and compare as you will hear from Siobhan Hayden.
Kevin: I’m still amazed at how many people in property – let’s talk about investors for a moment – still don’t understand the importance or the benefits of shopping around when you’re borrowing money, even if you’ve got an existing loan, to shop around and make some comparisons.
I want to talk about a website called HashChing, which we’ve mentioned in the show before. It’s a portal that’s totally free and puts you in touch with some of their partnered mortgage brokers so that you can get the best deal possible. Talking to me about this, the COO for HashChing, Siobhan Hayden.
Siobhan, thank you very much for your time.
Siobhan: Thanks for having me.
Kevin: Tell me about HashChing. How did it come about?
Siobhan: Look, I’ll start with the explanation for the name. So, HashChing is the merger of two words – hashtag and cha-ching. I think as an Australian business, we’re acutely aware that customers love to tag things on social media that they care about, so that’s the hashtag. And cha-ching is, no one should really over-pay for the privilege of owning their own home. So, we want to save people money where possible. So, HashChing is where the name came from.
Where it started, the founding director of the business was actually an executive with a large bank, one of the major banks in Australia, and had secured a home loan for himself with a staff discount and was really shocked to learn that his friend, who didn’t even work in banking, had got a better mortgage rate from his own bank, which shocked him.
He was thinking “I’m an executive. How is this possible?” And it worked out that his friend, who worked in the IT industry, had gone through a mortgage broker.
Kevin: And that’s how it all started.
Siobhan: That’s how it all started. The other add-on, of course, is that the founding member looked at all of the options on the internet, which is where most people start doing their research, and it was very confusing.
There were lots of options, there were lots of rates, lots of forms to fill out. Some of them made you fill out forms for a long time, and then you weren’t able to borrow through that channel, or you were instantly introduced to the lender that you didn’t really want to go with.
And then when he started looking at mortgage brokers, he also identified that there were no credentials, no ratings and reviews, and found it quite astonishing that we rate the driver of a car for 15 kilometers but we don’t have any feedback on a broker that’s helped a customer transact a $1 million mortgage.
Kevin: Siobhan, do you think this is the reason why, as I said at the outset, that there are so few people who actually understand the benefits of shopping around. Is it because it gets too hard?
Siobhan: It’s a good point, Kevin. I think most people know that refinancing or getting a loan is a bit of a heartache. It’s a bit of a pain in the bum. Let’s be honest. So, I think we’re looking for the path of least resistance, and there’s so much noise in the media and on the Internet about cheap rates and what does that mean?
And there are so many features to different rates, that people are just simply not aware of: redraw facilities, additional repayments, offsets, credit cards, ATM access. There’s a whole range of things that people need to digest, understand, and then also work out whether it’s right for you.
I think the benefit of a broker… And you know, nearly 60% of all new residential lending in Australia is assisted or introduced by mortgage brokers, and that participation of brokers in Australia has consistently increased year on year for the last 20 years, because the option outside of that is to really walk into a branch.
So, really, the two options are like light and dark. Brokers work with you, they’re across multiple lender products, not just one lender, which is of great benefit to customers, and then they do really help you go through all the paperwork and navigate that pain point. So, brokers are the preferred option.
Kevin: Yes. One of the questions I was going to ask you is how do you find a good broker, and I can understand that the answer to that would be “Well, go through HashChing.” So, can I then ask you, how does HashChing choose its brokers?
Siobhan: Well, I personally vet everybody! No. Look, we have a number of hurdles. A broker working with HashChing or partnering with HashChing has to have a minimum of three years’ experience or more. On our dashboard today, we have average years of experience of 10.8 years. So, first off, you need to understand all the lender products, and policy, which are relevant to different customers.
Then the ability for that broker to be able to be efficient and sharp and deal with customers on the phone. It’s a very different conversation on the phone than it is when you meet someone face to face. So, the ability to build rapport. And access to some great deals.
Once we have all those, we get them onto the dashboard, and then we start introducing them to customers and monitoring their performance – particularly, customers’ feedback at the end, with their ratings and reviews.
Kevin: Tell me about some of this feedback. What is the feedback you’re getting from consumers about the process?
Siobhan: Well, it’s excellent. People on Facebook, we have 36,000, I think, likes on Facebook, and followers, 3000 customer reviews on different brokers, and elements such as “I really thought I didn’t have a chance. My own bank said no to me. My broker was amazing. I didn’t realize they could be that great.”
Brokers helping customers go to auction. So, really going above and beyond, outside the normal remit of a broker. But, you know, “Held my hand at an auction and made sure I didn’t go beyond what I could, and I was so nervous, and my broker helped me.”
So, a whole range of really great comments from customers. And really, that’s what it’s about. If brokers are the preferred service channel, it’s about how brokers are now distinguishing that service with their customers, because really they do get additional customers from referrals, so that’s how their business works.
Kevin: How often should someone review their loan arrangement with the bank?
Siobhan: I think, like anything, it should be every two years. That doesn’t mean you end up refinancing, but it’s definitely good to have a look at what’s happening. We know that interest rates have been very stable for a long time, have basically gone down or held for a very long time, but people outside of that period may be on higher rates.
At HashChing, we’ve definitely seen a trend of customers on a 4.7%, 4.6% being refinanced down to a 3.7% or 3.6%. And that’s a substantial saving, when you’re looking at the long time that you do pay off a mortgage.
So, it’s best to know where you’re at. It’s all free, no obligation. And then at least you know where you stand, and maybe in another year, you look.
Kevin: Yes. You’ve certainly got nothing to lose. The website is called HashChing.com.au.
Siobhan: That’s correct.
Kevin: Siobhan, thank you so much for your time. Siobhan Hayden, who is the COO for HashChing. Thank you so much for your time.
Siobhan: Thanks for having me.