MyState Bank has today announced changes to the way its upfront commissions are calculated.
Acknowledging the “important work” done by the Combined Industry Forum (CIF), the bank has announced that it will calculate broker commissions on both new home loans and loan increases based on the drawn down balance (utilisation) on the 10th calendar day of the month (instead of the initial total approved loan amount).
The changes will come into effect from 1 January 2019.
MyState Bank group executive, broker distribution, Huw Bough, said that the bank was totally committed to supporting independent mortgage brokers and to adopting reforms in a proactive and timely manner.
“This is the right thing for brokers, the right thing for aggregators, and the right thing for the customer," Mr Bough said.
“Brokers are critical to the health of the Australian mortgage market, with 55 per cent of Australians now choosing to access lenders and their products via mortgage brokers. They provide an invaluable service and guidance to people as they navigate the home loan process.”
The bank highlighted that more than 50 percent of its loan book has been originated by the mortgage broker channel.
Mr Bough commented: “Our consistent service experience has proven to be a major drawcard for brokers and customers around Australia. Not only do our clients get to talk to someone onshore, they are treated as an individual and not just another number.
“At MyState Bank, we will continue to work in partnership with our aggregators, brokers and regulators to ensure we are at the forefront of initiatives that seek to reinforce positive customer outcomes and strengthen the position of the broker channel well into the future,” he concluded.
Lenders expected to make changes by the end of the year
NAB became the first major lender to implement the recommendations from the ASIC and Sedgwick reviews, which were backed by the Combined Industry Forum package of reforms.
Three of the four major banks have now done so (with an announcement from ANZ expected imminently), with several non-major lenders following suit.
The CIF recently hosted an event that further outlined its work on mortgage broking reforms and reiterated that lenders are expected to make the remuneration changes by December 2018.
[Related: Major bank changes broker commissions]