New recommendations from the Royal Commission mean that customers would be required to pay fees directly to their Mortgage Broker for their services. In the past Brokers have been paid by way of commission from Banks and independent lenders. Although these changes are yet to be confirmed the Government acknowledges that the way that Mortgage Brokers is paid requires investigation.
This proposal means that power would be handed back to the big 4 banks including Commonwealth, NAB, Westpac and ANZ. This is because consumers would be less inclined to pay the fees for broker services when they could source their loans at competitive rates.
As a purchaser of property, it is important to take into consideration the cost of interest associated with your loan. If these proposals are brought to fruition this could result in the Interest rate rising. It is in this case that payment to mortgage brokers for their services would be beneficial to ensure you receive the best possible loan package.
It has been confirmed by Treasurer Josh Frydenberg that the trail commission payable to brokers will be abolished by 1 July 2020. Trail commission is the amount payable to the Broker on a timed basis for the life of a settled loan.