Kiwibank extends hand to brokers
Kiwibank has started selling loans through mortgage brokers for the first time, through a deal with broking group Mortgage Link.
Wednesday, February 4th 2009, 6:00AM
by Maria Scott
Mortgage Link brokers in five locations, Auckland, Masterton, Palmerston North, Hokitika and Queenstown will be able to offer Kiwibank loans in a six-month pilot scheme.
The state-backed bank has competed fiercely in the mortgage market, often to the detriment of brokers because it did not pay commission to them as introducers of business.
Company spokesman Bruce Thompson said: “We always had an open mind (to brokers) and are having a look to see how it works.”
He noted that brokers accounted for a large share of the mortgage market.
The most recent research by the New Zealand Mortgage Brokers’ Association put members’ share of the new mortgage market at nearly 40%.
Brokers are likely to welcome the Kiwibank development in a market that has seen commissions from other lenders reduced and demand for loans fall off in the downturn.
Thompson declined to discuss the commission that would be paid to Mortgage Link brokers as did Rod Templeton, chief executive of the broking group.
Templeton said the arrangement with Kiwibank would enable the group’s brokers to improve the options offered to clients.
Discussions between the bank and the broker group had started a year ago.
“We’ve always had a strategy of looking for new lenders and getting existing lenders to look at us differently,” he said.
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