Broker commissions could be set to grow, as competition between Australia’s majors, non-majors and non-bank lenders heats up.
Speaking to The Adviser, Oxygen’s general manager James Green said the June rate cut had given Australia’s non-majors and non-bank lenders the opportunity to come back into the market and steal market share away from the majors through cheaper rates and higher broker commissions.
According to Mr Green, most of the major lenders did not pass on the full rate cut in June and, as such, their margins increased.
“By not passing on the rate cut in full, it increased the margins out there in the market place, which allowed Australia’s non-bank and non-major lenders to re-establish themselves in the market place,” Mr Green said.
“Already at the coal face, we are seeing a lot more applications going to Australia’s non-major lenders because they are not only offering lower rates for borrowers, but higher commissions for brokers.
“I think this enhanced competition and aggressive move by Australia’s non-majors and non-banks will put pressure on the majors to react and ultimately lift broker commissions.”