by Janine Ogier
From then, ANZ will stop paying the 0.25% trail commission currently paid on new loans.
“The move is in light of pressure on home loan margins right across the board in the last year or two,” ANZ spokesman Craig Howie says.
Instead, the bank will increase the up-front commission it pays from 0.625% to 0.7% and it will pay an at risk component of up to 0.2%, subject to various performance criteria.
ANZ had been consulting extensively with mortgage brokers in recent months, Howie says.
“We think the new structure meets both the bank’s objectives of providing customers with competitive mortgage products and at the same time acknowledges the broker feedback we got about bringing a quality and volume component into the commissions,” he says.
The new commission would differ broker-to-broker and deal to deal as there was a component built in for volume and value.
“ANZ definitely remains committed to the mortgage broker channel,” Howie says.
Looking at the financial implications, Mike Pero Mortgages chief executive Jeff Staniland says, all things being equal, the listed company’s revenue would increase in the first full year under the new arrangement.
“Beyond that, the outcome is less certain and will be dependent on a number of different factors, including our mix of business among different lenders and the rate of growth in mortgages arranged,” he said.
Westpac is now the only high street bank paying trail commission to mortgage brokers. Other first mortgage lenders paying trail commission include Sovereign, Superbank and HSBC, while lenders such as Bluestone, Liberty and Pioneer also pay it.
Brokers would have preferred to keep trail commission, Staniland says.
“It is an evolutionary thing. (Lenders) started out competing on price, then they competed for volume. Now they are saying we will compete for volume and also for quality, and they are changing the (commission) structure,” he says.
| « Lenders tweak rates | NZ Finance expects 50% return on investment » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved