MogoPlus launches Mortgage Stress Predictor

MogoPlus has launched the new tool called a Mortgage Stress Predictor in the lead-up to many borrowers facing the expiry of their fixed-rate terms.

The stress predictor uses predictive insights to understand how a customer’s future ability to service their mortgage will be affected by rising interest rates and cost-of-living pressures brought on by high inflation.

The solution uses income and expense behaviour to provide predictive insights before a refinancing event occurs and helps identify vulnerable customers earlier in the cycle.

Then, the existing lender can undertake a proactive and responsible conversation with the borrower about their options.

Reportedly, Reserve Bank of Australia (RBA) estimates around 800,000 fixed-rate mortgages that represent loan liabilities of $500 billion are due to be refinanced in 2023 alone.

MogoPlus chief executive Mike Page said one of the first things lenders need to do is understand each borrower better when it comes to customer retention.

“Our Mortgage Stress Predictor enables a bank to get ahead of these issues, and take proactive measures to help that individual customer,” Mr Page said.

“At the peak of the pandemic housing boom, it was possible to get a fixed rate loan with an interest rate of 2 per cent per annum or less.

“As those loans mature, borrowers will need to navigate higher interest rates, the impact of LVRs on softer property values, and the monthly hip pocket impact of inflation on their cost of living.

“That’s why we developed the Mortgage Stress Predictor, so lenders can understand who affected borrowers are, and deliver that customer focus using technology, rather than having to increase headcount.”

Using tech is necessary for client retention

Adam Grocke, the founder and CEO of Sherlok, an automated retention, repricing, and home loan refinancing tool, said in April 2022 that borrowers were increasingly shopping around and researching for better rates using the digital platform.

He stated that brokers could no longer rely on the relationship when loans were settled or mass marketing emails.

Mr Grocke added that technology exists that lets brokers quickly review, reprice, and refinance their clients, meaning that broker workloads are not a valid excuse when it comes to client retention.

“Brokers need to start now and capitalise on all the hard work that went into signing that client in the first place. When interest rates rise, they’ll be glad they did,” he said.

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