Farmers’ loyalty is costing them - Loan Market heads bush
- By: "Farm Tender" News
- Hay & Fodder News
- Aug 06, 2017
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The White family’s Loan Market property brokering business is heading to the bush, setting up a rural loan broking business that hopes to break the ‘‘blind trust’’ of farmers with their banks.
Loan Market, which has 700 brokers and settled $10.5 billion in loans in Australia over fiscal 2017, has appointed Martin Pentecost to head the rural expansion.
‘Farmers’ loyalty is costing them,’’ Mr Pentecost said. ‘‘We want to upset the status quo where some farmers are borrowing at over 6 per cent when they shouldn’t be."
While more than 50 per cent of Australia’s residential market borrowers use a mortgage broker to organise and refinance mortgages, farmers are largely relying on loyalty to their private bankers with many families using the same bank for generations.
The cost of this is often many tens of thousands of dollars annually in interest repayments.
‘‘It is blind loyalty,’’ Mr Pentecost said.
With the rate of deals he is doing – especially for farmers looking to buy more rural property – the new rural broking arm could seal at least $200 million in loans by the end of next year.
Mr Pentecost will initially target areas such as Bathurst, Yass and Tamworth in NSW where Ray White has a strong rural network, as well as Emerald and Rockhampton in central Queensland where there have been some issues with banks.
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