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Australians think free broking claim's dubious

While the debate on whether it is appropriate for mortgage brokers to promote their services as "free" to their customers has flared recently in New Zealand, it appears the Australian industry is about to decide such claims aren’t kosher.

Tuesday, March 23rd 2004, 10:27PM

by Jenny Ruth

The debate in New Zealand was prompted by Mortgage Link’s decision to drop the claim from its advertising.

Mortgage Industry Association of Australia (MIAA) chief executive Phil Naylor says that following Australian Securities and Investments Commission (ASIC) investigation into misleading advertising by a couple of broking firms, his association has drawn up draft advertising guidelines.

The idea is to self-regulate before regulations are imposed on mortgage brokers.

Once ASIC has approved the guidelines, they will be distributed to all MIAA members.

The two companies involved in the ASIC investigations Fintrack and Express Home Loans, had been making misleading claims, including that they weren’t influenced by the commissions they received as to which loans they recommended because they were receiving the same commissions from all lenders. They weren’t. Another claim was that they represented 40 lenders when the actual number was somewhat less.

While these particular claims weren’t factually correct, there is still a lot of confusion in the broking industry as to what claims could be made legitimately and which couldn’t, Naylor says.

"You’ve got to be careful about saying things that might mislead people, even though you don’t think you’re misleading when you make a claim," he says.

And the claim to offer a "free" service definitely falls into that category in his view.

"’Free’ is one of the areas that might be dubious. Even though the customer’s not paying the broker for any service, whether it’s free in a wider sense is a moot point," Naylor says.

Other problem areas, given that brokers in both Australia and New Zealand are remunerated by the lenders, are claims to provide "objective" advice or "independent" advice, he says.

« Mortgage brokers may need annual accreditationMike Pero looking to list »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.60 6.75 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.49 6.49 6.49
TSB Special 7.89 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.02 5.79 5.69

Last updated: 20 November 2024 9:45am

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