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Mortgages

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Poulter wonders about future of trail commissions

BNZ's withdrawal from mortgage broker market may signal bigger changes for the industry.

Tuesday, June 24th 2003, 9:25PM

by Jenny Ruth

While most mortgage brokers aren’t much troubled by Bank of New Zealand’s decision to cease dealing with their industry, Roger Poulter at Mortgage Link worries it might just be the thin edge of the wedge.

BNZ’s parent, National Australia Bank, may be experimenting with BNZ in a way that it can’t afford to with its core Australian business, he suggests. If the experiment is successful enough, it may introduce the same policy in Australia.

Certainly, BNZ, who was only a small player in the broker market, claims it is gaining market share.

"I think brokers have stuck their heads in the sand over BNZ. Who knows if this isn’t a forerunner of what’s going to come? Just say ANZ or Westpac or HSBC bought National Bank. Why wouldn’t they consider doing the same thing?" he asks.

"The broking industry would be wise to not only look outside the box here, but to start acting outside the box, to start thinking about the industry two or three years from now, rather than what it is right now."

In the past, banks have been happy to deal with mortgage brokers because it was a cost-effective way of getting business. "I’m not sure that the cost-effectiveness is still there," Poulter says.

Poulter has the opportunity to look at the situation from both sides of the fence because his related firm, Pacific Home Loans, is also in the business of providing and managing mortgages.

That makes him wonder whether the days of the current commission structure are numbered.

"The cost of origination is getting greater. The margin in the product, particularly the fixed rate loan, is getting less and the cost of administration is getting greater," he says.

Brokers are wanting higher commission, yet the life of the loan is coming down, to as little as three and a half years in some instances.

"If you’re going to pay 0.65% up front plus 0.2% or 0.3% trail fees, you don’t have to be a Rhodes Scholar to think this isn’t very economic," Poulter says.

The trend in the US market has been a swing back to paying upfront fees only, and they may happen here.

"It’s a little black cloud on the horizon that’s quietly creeping towards us," Poulter says.

« RSA mortgage insurance downgradedANZ cuts ties with brokers »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build ▼4.94 - - -
AIA - Go Home Loans ▼7.49 ▼5.79 ▼5.49 ▼5.59
ANZ ▼7.39 ▼6.39 ▼6.19 ▼6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼5.79 ▼5.59 ▼5.59
ASB Bank ▼7.39 ▼5.79 ▼5.49 ▼5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance ▼7.90 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One ▼7.54 - - -
BNZ - Rapid Repay ▼7.54 - - -
BNZ - Std ▼7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney ▼7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ ▼6.95 ▼5.79 ▼5.59 5.69
Co-operative Bank - Standard ▼6.95 ▼6.29 ▼6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - ▼5.99 ▼5.89 -
First Credit Union Standard ▼7.99 ▼6.69 ▼6.39 -
Heartland Bank - Online ▼6.99 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 ▼6.65 6.40 -
ICBC 7.49 ▼5.79 ▼5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank ▼7.25 6.89 6.59 6.49
Kiwibank - Offset ▼7.25 - - -
Kiwibank Special ▼7.25 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society ▼7.94 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank ▼7.49 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo ▼4.94 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank ▼8.19 6.49 6.49 6.49
TSB Special ▼7.39 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac ▼7.39 ▼6.39 ▼6.09 ▼6.19
Westpac Choices Everyday ▼7.49 - - -
Westpac Offset ▼7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - ▼5.79 ▼5.49 ▼5.59
Median 7.49 5.99 5.79 5.69

Last updated: 3 December 2024 9:25am

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