A broker lost a $400,000 refinance.
Not because she did poor work.
Not because she was slow.
Not because the lender declined it.
She lost it over 0.2%.
When the client said they were shopping around, she replied, “Let me know if you’d like me to match their rate.”
In that moment, she confirmed something dangerous.
She confirmed that rate is all that matters.
And once rate is all that matters, you are no longer a broker.
You are a price tag.
The commodity trap
If the only difference between you and the broker down the road is 0.2%, you are not building a business. You are running an auction.
There will always be someone cheaper.
Always.
In Australia, lenders move pricing weekly. Policy shifts. Cashback campaigns come and go. If your value is tied to rate alone, your pipeline will rise and fall with the specials sheet.
That is not a strategy. That is survival mode.
The real job of a broker
Your job is not to find the cheapest rate.
Your job is to:
-
Structure debt correctly
-
Protect borrowing capacity
-
Manage risk
-
Align lending with the client’s long term goals
-
Ensure compliance under NCCP and responsible lending
-
Anticipate future changes in income, expenses and life stage
The rate is one lever.
It is not the whole machine.
When lenders assess loans, they look at serviceability buffers, living expenses, liabilities, credit conduct and future risks. Responsible lending requires a proper assessment of whether the loan is not unsuitable for the client.
Yet some brokers reduce all of that to a decimal point.
What should she have said?
When a borrower says, “I am shopping around,” that is not a threat.
It is a signal.
It means they do not yet understand your value.
A stronger response might have been:
“I completely understand. Before you compare on rate alone, can I show you the differences in structure, flexibility and long term cost?”
Or:
“Rate is important. But can we also look at your goals over the next five years? Because the cheapest rate today is not always the cheapest loan over time.”
You are reframing the conversation.
You are moving from price to strategy.
The hidden cost of 0.2%
On a $400,000 loan, 0.2% is $800 per year.
Around $15 per week.
But what is the cost of:
-
A poor loan structure?
-
No offset when it would suit?
-
Inflexible features?
-
Limited future borrowing capacity?
-
A lender with tight policy when life changes?
If you have built trust, educated properly, and positioned yourself as an adviser, a client will not leave for $15 per week.
If they do, it means the relationship was built on price from the beginning.
And that is on us.
Training borrowers how to treat you
When you say, “I can match that,” you teach the borrower something.
You teach them that your margin is flexible.
You teach them that you were not offering your best solution first.
You teach them that shopping you is rewarded.
Next time, they will push harder.
You have trained them to negotiate you down.
A better positioning strategy
As a new broker in Australia, this is critical.
Before you ever present a rate:
-
Deeply understand the client’s goals.
-
Explain policy differences between lenders.
-
Highlight risk factors and future plans.
-
Show how structure impacts flexibility.
-
Document why the recommendation is not unsuitable and in their best interest.
Then present the rate.
The rate becomes part of a bigger picture.
Not the headline.
The brokers who succeed
The brokers who build long term businesses do not win because they are the cheapest.
They win because:
-
Clients feel understood.
-
Clients feel protected.
-
Clients see strategy.
-
Clients trust the advice.
Trust beats 0.2% every time.
But trust must be built before the comparison shopping starts.
The uncomfortable truth
If a client leaves purely over 0.2%, one of two things happened:
-
They were never your ideal client.
-
You did not clearly communicate your value.
Both are lessons.
Neither is a disaster.
Because the real risk is not losing one deal.
The real risk is building a business where every deal is fragile.
Do not build a fragile business.
Build a valuable one.
And remember this:
If you compete on rate, you compete with everyone.
If you compete on insight, structure and care, you compete with very few.
Choose carefully.