Royal Commission -

You may have heard the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has made some recommendations about changing how mortgage brokers get paid. There’s been a lot of noise in the media, so we thought it might be a good idea to update you about what’s going on and how it may affect you as a home loan customer – but first, we’d just like to say that it’s business as usual for the time being.

We’re here to help you with great service for all your finance needs – and we’ll be keeping your best interests at heart, as always.

So, what’s going on?

The Royal Commission has recommended that lenders no longer pay mortgage brokers a commission and that borrowers should pay their mortgage broker a fee instead.

As a home buyer who understands all the benefits of using a mortgage broker, you may find this recommendation quite troubling. The last thing you need when you’re buying a home is to come up with more money for mortgage broking fees, right? And with the loan application requirements becoming increasingly complex, how would you get by without one?

Unfortunately, these are not the only considerations regarding the Royal Commission’s recommendation. Changing to a borrower-pays system could have a seriously negative impact on competition in the home loan market and this could prove to be disastrous for everyone.

How would reducing competition affect you?

Over the last 20 years, the work of mortgage brokers has driven competition in the home loan market. Our work in providing home loan customers with choice and value has forced banks to cut their own profit margins and keep your fees and interest rates down. Almost 6 out of every 10 (59.1%) home loans go through a mortgage broker and this keeps banks on their toes and working to constantly improve their loan products.

If the proposed changes were to become law, many consumers would not be able to afford our services and our businesses would struggle to survive. Without brokers:

  • Too much power will go to the big banks, which could drive your loan costs up.
  • Smaller lenders may have to exit the home loan market, reducing competition.
  • This will result in less choice of loan products and less access to credit.
  • You’ll get no assistance understanding increasingly complex loan criteria.

People who need a broker’s help the most – young people, low-income earners, those who have difficulty understanding the home buying process – may never get the assistance they need to achieve the great Australian dream of owning their own home.

Changing to a borrower-pays system would not just be a tragedy for those people, it may put our entire economy at risk in the long-term. A healthy, competitive property industry is a major driver for Australian economic growth and provides a great deal of employment.

What can we do about it?

The mortgage broking industry has united to get behind mortgage brokers and to support the continuation of healthy competition in Australia’s home lending market. You may have seen the TV commercial from the Mortgage and Finance Broking Association of Australia (MFAA) promoting the service, value and choice that we mortgage brokers provide to you.

You can assist us, and all Australians, by pledging your support for mortgage brokers at and Your Broker Behind You.

Once we’ve collected enough pledges, the Government will be forced to listen to what we have to say about preserving broker commissions and upholding your right to a competitive lending market that provides you with genuine choice and personalised service.

Thank you for supporting our business. If you have any questions, please just give us a call.