Jessica Darnbrough and Vivienne Kelly
A majority of mortgage brokers believe other lenders will follow Macquarie’s lead and lift their broker commissions.
According to a recent straw poll, more than 70 per cent of brokers believe the industry could see the upfront and trail commissions paid to brokers by the majors, non-majors and non-bank lenders increase over the coming months.
These results closely align with what is already starting to take place in the marketplace.
Earlier this week, Australian First Mortgage announced it would increase the upfront commission it pays to brokers on its Complete Option product from 0.65 per cent upfront to 0.70 per cent.
Speaking to The Adviser, LoanKit’s chief executive Simon Dehne said the moves by Macquarie and AFM could be a sign of things to come.
Of course, he believes moves will only be made by Australia’s non-major and non-bank lenders as the big four would be “quite happy” with their current market share and broker economics.
“I think if anyone is looking at changing their commission structure, it would probably be the second-tier lenders,” Mr Dehne said.
“The majors are happy with the way they are balancing everything at the moment. In addition, they are probably very happy with the volumes that they’re getting from brokers, so they don’t see the need to adjust commissions.”
“Australia’s second tier lenders on the other hand, have got to grow their market share, otherwise they’re not going to be able to make any money. As such, they could look to move on commissions in the near future.”