Are you prepared for the influx of fixed rate loans due to come off in 2023? When it comes to refinances, there are obligations under the NCCP and BID that, as a broker, you’ll need to be aware of.

The NCCP Act requires an overall cost saving for the client, or if the overall cost savings are minimal then the new product must better meet the client’s requirements and objectives.

The BID obligations require brokers to consider the costs involved with the debt consolidation and refinancing, and there must be an overall cost saving to the client when refinancing. If there is no overall cost saving or they are minimal, the new product must better meet the client’s requirements and objectives.

What tools can I use to help me?

Within Flex, the ‘total interest costs’ field must be completed for the application to progress and to ensure it is appropriately compared and disclosed in the CP inc. PCA.

A reminder will also appear, prompting brokers to confirm that the relevant modelling and comparison of products have been completed.

Brokers can use either Advanced Modelling or other means, such as the AFG Debt Consolidation & Refinancing Calculator (or other supported AFG calculators), in order to meet BID requirements. The calculators can then be saved as a PDF and uploaded to the client file, and sent to the client as a supporting document to the CP inc. PCA.

Important notes:

1. Advanced Modelling doesn’t consolidate multiple loans into one, so in those instances a calculator will be required.
2. If you are using the AFG Debt Consolidation & Refinancing Calculator please ensure the latest version is always used by referring to the above Help page rather than saving a version down.
3. The AFG Compliance team has developed other tools to assist brokers to assist them to meet their Best Interests Duty obligations, please view here.