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More commission changes for brokers

Mortgage brokers face a new round of commission cuts. Westpac is cutting commission from today, while Sovereign, part of the ASB banking group will reduce payments from the beginning of December.

Friday, November 2nd 2007, 6:28AM

by Maria Scott

This follows cuts of up to 30% in upfront payments to brokers, implemented in October by ANZ, National Bank and ASB. Westpac, in common with the other banks, pays upfront commission only now and is cutting this to 0.65%. Previously it paid 0.75%, plus potential bonuses of up to 0.1%.

Sovereign began reviewing its commission rates in September, intending to implement changes from 1 November. It postponed reductions after consultations with brokers, although it cut discounts on some loan products from the beginning of October. The lender has now announced that from 1 December, advisers who do not currently receive trail commission will see upfront payments reduced from 0.75% to 0.65%. Advisers who receive a mixture of up-front and trail commissions can choose between two options; 0.45% up-front and 0.20% trail or 0.5% up-front and 0.15% trail. Those who do not notify the lender of a preference under the combined option by 20 November will be paid at the 'default' rate of 0.45% up-front and 0.20% trail.

The changes will apply to loans advanced from 1 December, not only to business received from 1 December which means that loans in the pipeline settling from 1 December will be paid at the new rates.

Sovereign said that changes to its product pricing implemented in October had had a positive impact on its bottom line but not enough for it to avoid changes to remuneration. The company said that the changes were equivalent to as little as 6.5% over five years on the default combination option.

Another non-bank lender, Bluestone, has changed its commission structure, cutting upfront payments but increasing trail commissions or, in some cases, introducing these for the first time. Bluestone said that it believed trail payments would support brokers long term and to build lasting relationships with clients.

Under the new arrangements brokers will receive combination, up-front and trail packages on all products except equity release where and upfront-only option is still available.

« Home loan rates being tweakedOfficials ponder tax treatment of HER »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▼2.29 ▼2.59 ▼2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
HSBC Special - 1.99 - -
Lender Flt 1yr 2yr 3yr
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.79 3.04 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 2.79 2.79 3.15
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.29 2.29 2.65
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
The Co-operative Bank - Standard 4.40 2.79 3.09 3.29
TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.79 2.99 2.80

Last updated: 4 March 2021 8:47am

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