Offer higher quality loans

Lower interest rates should be good news for members. But every time rates go down, you have to staff up to help members refinance their loans. In some cases, a credit union will raise its interest rates to discourage refinance applications. If a member chooses to refinance with a new lender, you incur hefty transaction costs from writing a new loan to replace it. The rate-resetting feature of the Harmony Loan allows the member to lower their interest rate with the click a button. They avoid the arduous refinance process and there’s no need for you to hire additional staff.

Improve customer lifetime value

The longer you keep a member, the more opportunity you have to build a relationship and serve their other financial needs. The average life of a mortgage today is two to three years. Our data suggest the average customer will stay in a Harmony Loan for at least six to nine years.

Compensate financial entity partners

When a pool of Harmony Loans is created, the financial entity is paid a commission up front, as well as annually, when members initiate the rate-resetting feature. This motivates the financial entity partner to prevent runoff when interest rates decline. Finally, there is a structure that allows credit unions to effectively compensate their partners over time while simultaneously offering a benefit-rich mortgage product to their members.

To learn more about how we work with our credit union partners, click here.