ANZ believes brokerage could become "a privilege for the rich"

Loading

However, Mr. Elliott also pointed out the risk that if clients were to pay the lump sum directly, low-income people with smaller loans would be less likely to be rejected by a mortgage broker.

"The problem with fixed costs, if I may say so, is that it is a major benefit for people who can afford large mortgages and have the financial position to do so. This is potentially a burden for those with small … a subsidy would be paid by those who have the least means, and this could make bargaining a privilege for the rich, "Elliott said. .

His comments come after it was revealed last week that the Commonwealth Bank had been working hard on a plan to move to a fixed-fee model, but had not moved forward because it feared that other banks do not follow.

Thursday later, Johanson also highlighted a potential risk of banning trailing commissions for mortgage brokers – a recommendation from the Productivity Commission earlier this year.

Rowena Orr, QC, at the request of lead counsel for a possible reason for retaining trailer fees, responded, "If, because of the trail ban, we force customers to pbad only through banks and bank branches, I think, that would be a very bad result. "

Comment highlights the complexity of changing mortgage broker commissions, which are generally supported by smaller banks because of the role brokers play in helping them gain market share from larger rivals with more branches to sell their products.

Mortgage brokers are issuing more than half of all new mortgages and banks are paying about $ 2.4 billion a year to brokers and aggregators, according to a report from last year released by the Australian Securities Commission. securities and investments.