I support Mortgage Brokers not Banks!

 

How the findings from the royal commission regarding Broker commissions may affect you;

As it stands; finance brokers currently provide a service where they will assist you “the customer” to find the best lender at the most comparable rate. They typically have access to multiple lenders.

A broker will often place your loan at your own bank at a lower rate than you could negotiate dealing direct with your own bank.

You do not pay the broker, as they currently are paid a fee from the banks/lenders themselves. So this service currently cost the customer nil.

The changes; potential reforms to broker commission are currently being discussed which could result in a blanket ban on commissions being paid by the banks to the broker (upfront and trail) and the introduction of a customer fee-for-service of thousands of dollars to be charged to the customer by the broker. So essentially the customer replaces the bank in paying the fee.

And it gets worse; an alternative proposal is that the customer must pay a fee to deal directly with a bank branch to arrange a home loan.

Taking choice away from customers by ending competition in the home lending market would likely result in:

• Increased fees and interest rates for customers – as banks seek to restore their declining interest margins and increase profit without intense competition to keep prices down
• Diminishing availability of credit – especially for customers in regional and rural Australia, where few branches remain, and for lower income customers with more complex credit needs such as first home buyers
• The end of trade for up to 17,000 small businesses, and the resultant loss of up to 27,000 FTE jobs in Australia

Mortgage brokers are critical to competition in the home lending market in Australia.

If enacted, these changes could make the mortgage broker channel unsustainable, forcing customers back to the big banks, and cutting customer access to smaller lenders and credit. This could result in customer paying higher interest rates and fees.

Show your support by contacting your local Federal MP today.

Kind Regards

John Kemsley
Managing Director
Platinum Realty Group