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AFG introduces ‘appropriate’ home loan protocol

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Hannah Dowling 6 minute read

The mortgage aggregator has introduced a new process for loan applications that requires both brokers and consumer to approve that a loan is “appropriate”.

Australian Finance Group Ltd (AFG) has introduced a new standard procedure for loan applications, which sees a single-page summary of the suggested home loan product attached to the front page of the credit proposal.

The concise one-page document will spell out to the customer their requirements and objects, the recommended product, the reasons why the product was selected, as well as any remuneration to be paid by the lender.

Further, the document also provides similar material about other products considered before settling on the final product decision.


The document will need to be approved by the AFG broker arranging the loan and by the customer and will be included on top of the existing AFG loan documents.

According to AFG, the inclusion of the new summary document “reinforces to customers that they remain the number one priority for mortgage brokers”.

It comes ahead of the implementation of the new duty for brokers that requires them to work in the “best interests” of their customer.

AFG CEO David Bailey commented: “Good customer service is embedded in a mortgage broker’s DNA. It’s central to their business model.

“To demonstrate that we are meeting the best interests test, rather than just complying with the new law when it comes in next year, we are taking proactive steps to demonstrate to customers that they have always been, and remain, the number one priority,” he said.


“We are lifting our disclosure obligation to customers, and this information is presented in a way that is easy for customers to understand. It eliminates the need to scour reams of pages looking for the detail.”

He continued: “If it’s in the best interests of customers, then we should be doing it today. That’s how the mortgage broker business model works.”

Mr Bailey stated that the move aims to allow brokers to continue to foster their professional relationships with their clients, and create greater opportunities for brokers.

“A mortgage broker’s business is entirely dependent upon their relationships with customers. Without good customer service, a customer will not return to their mortgage broker and they will not refer friends or family.”

He concluded: “A mortgage broker’s business is built on fostering long-term relationships. In the main, mortgage brokers are small businesses focused on looking after their customer in the hope that word of mouth will open up new opportunities.

“Without an absolute commitment to the customer, it would be impossible for mortgage brokers to carve out such a significant slice of market share,” Mr Bailey said.

[Related: Industry united in push for clawback overhaul]

AFG introduces ‘appropriate’ home loan protocol
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Hannah Dowling

Hannah Dowling

Hannah Dowling is a journalist for The Adviser and Mortgage Business.

Prior to joining Momentum Media, Hannah worked as a content producer for a podcast catering to property investors. She also spent six years working in the real estate sector at a local agency. 

Email Hannah at: This email address is being protected from spambots. You need JavaScript enabled to view it.



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