by Jenny Ruth
The move follows Westpac's decision last September to tighten its clawback conditions for loans that didn't stay on its books long, reduced trail commissions for the first five years a loan stays in force but increased trail commissions on loans which last longer than five years.
National wouldn't provide details but New Zealand Finance Holdings told the Stock Exchange that the will be increasing upfront commissions from 0.55% to 0.75% of the loan value from June 1 and will stop paying trail commissions altogether, currently 0.2% of the loan value a year.
"It's a pretty fundamental change to the business because trails were to stop churn," Mike Pero Mortgages chief executive Jeff Staniland says.
National Bank isn’t saying much on the issue.
"In August 2004, the National Bank discussed with brokers the effects of reduced interest margins on fixed interest rate loans," bank spokesman Robert Reid says.
"We have been able to incorporate the information we gained from that consultation, into our approach going forward. We are continuing to hold meetings with brokers, and it would not be appropriate to comment further until those meetings have concluded," he says.
Despite the move, National is still hoping to keep dealing with mortgage brokers. "Brokers remain an important source of new business, and complement our branch and mobile mortgage manager channels.
Brokers have been a key part of our ongoing success in the home loan market. We look forward to continuing that relationship in the future," Reid says.
ANZ spokesman Craig Howie says his bank has also "been reviewing its position in light of an ongoing reduction in margins.
We remain committed to comprehensive consultation with mortgage brokers before making any changes to our broker commissions. We also remain committed to the broker channel.
We cannot comment further until we have completed the consultation with brokers."
The New Zealand Mortgage Brokers Association says cutting or reducing trail commissions isn't in the long-term interests of the industry or the consumer.
"It does not demonstrate a long-term commitment to the customer and fails to recognise the role the broker plays in the ongoing management and support of the client relationship," it says.
| « Bank Direct raises two-year rate | Brokers unhappy with National Bank » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved