National Bank will be cutting its trail commissions paid to mortgage brokers from June, the bank confirmed today.
Wednesday, April 20th 2005, 8:56AM
by The Landlord
Its parent bank, ANZ Bank, is also reviewing its commission structure.
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.
