The Royal Commission has recommended that lenders no longer pay mortgage brokers a commission and that borrowers should pay their mortgage broker a fee instead.
As a home buyer who understands all the benefits of using a mortgage broker, you may find this recommendation quite troubling. The last thing you need when you’re buying a home is to come up with more money for mortgage broking fees, right? And with the loan application requirements becoming increasingly complex, how would you get by without one?
Unfortunately, these are not the only considerations regarding the Royal Commission’s recommendation. Changing to a borrower-pays system could have a seriously negative impact on competition in the home loan market and this could prove to be disastrous for everyone.
Over the last 20 years, the work of mortgage brokers has driven competition in the home loan market. Our work in providing home loan customers with choice and value has forced banks to cut their own profit margins and keep your fees and interest rates down. Almost 6 out of every 10 (59.1%) home loans go through a mortgage broker and this keeps banks on their toes and working to constantly improve their loan products.
If the proposed changes were to become law, many consumers would not be able to afford our services and our businesses would struggle to survive. Without brokers:
Once we’ve collected enough pledges, the Government will be forced to listen to what we have to say about preserving broker commissions and upholding your right to a competitive lending market that provides you with genuine choice and personalised service.
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This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.