Bank of Queensland has become the latest lender to announce changes to the way it remunerates mortgage brokers, bringing in a new calculation from 1 January.
In an update to brokers, Bank of Queensland (BOQ) has announced that it will calculate upfront commissions for all facilities (except construction loans) drawn down on or after 1 January 2019 based on the draw down amount (net of offset).
The new calculation will be based on the net loan balance at draw down date plus five calendar days.
BOQ has added that it will not pay upfront commission for any subsequent draw downs.
Upfront commissions for construction loans will continue to be based on the settled limit.
The change makes BOQ the latest lender to change the way it remunerates mortgage brokers, moving in line with the recommendations from the ASIC and Sedgwick reviews, which were backed by the Combined Industry Forum (CIF) package of reforms.
Natasha Kelso, head of BOQ Broker, said: “These changes reflect the importance BOQ places on ensuring our customers obtain loans which are appropriate in both size and structure, are affordable and meet their individual needs and objectives at the time of borrowing.”
All four major banks have committed to adopting the new commission structure, as have lenders such as Adelaide Bank, AMP Bank, Bankwest, ING, Macquarie Bank, ME Bank, MyState Bank, Suncorp Bank and Virgin Money.
While Bankwest was the first lender to bring in the new commission structure (bringing it into being on 1 July 2018), NAB was the first major bank to move to the new commission structure, with both NAB (and its wholesale funding business Advantedge) moving to the new payment model last month.
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 the end of this year.
[Related: Virgin Money changes broker remuneration]