Westpac’s decision to cut broker commissions appears to have given new momentum to media attacks on the broker channel.
A number of tabloids have come out in recent weeks slamming broker-originated mortgages as a more costly option for borrowers because of the commissions paid to brokers.
The aggregation industry has voiced its concerns over the potential damage that such misleading information could have on the industry at a time when Australian borrowers have already been hit hard by a combination of successive RBA rate rises and increased funding costs.
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X Inc CEO Jennifer Nielsen said media misrepresentation of the link between broker commissions and mortgage costs could have a negative impact for both brokers and borrowers.
“Comments like these could be very damaging and are simply untrue,” said Ms Nielsen. “For someone to go to market and make comments like that they must have their own agenda.”
Ms Nielsen said the difference in price between a broker- and bank-originated loan amounted to around “the cost of a round of drinks”.
National Mortgage Brokers’ managing director Gerald Foley agreed with Ms Nielsen that misleading media reports “could be very damaging”.
“I can think of maybe two products out of hundreds that cost more because they are distributed via a broker,” he said.
