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Banks pay real estate agents for home loan referrals

Mortgage brokers aren’t the only people involved in the housing market to be paid commissions by the banks: all five of the major home lending banks have confirmed they pay in some form people such as real estate agents for referrals for home loans.

Wednesday, May 26th 2004, 11:20PM

by Jenny Ruth

That includes Bank of New Zealand, despite its current aggressive advertising campaign using the slogan: "We’ve cut out brokers to give you a great home loan deal."

BNZ spokesman Owen Gill says his bank has not and would never pay cash for referrals. However, "there are some instances where we give people some Flybuys." Flybuys points can be redeemed for a wide range of goods and services, including travel and accommodation.

That suggests BNZ’s campaign really should be making it clear that although it has cut out some middlemen, it hasn’t cut out others.

Gill says only the bank’s mobile mortgage managers, of which there are about 60 nationwide, have the power to grant real estate agents Flybuy points in exchange for referrals. "Other people selling our home loans – it doesn’t operate for them. We’ve made these arrangements transparent," he says.

Agents who are likely to receive Flybuy points "must disclose that’s what’s going to happen," he says.

"Where a transaction goes through and we think the customer still needs to be informed that the agent will get some Flybuys, we will disclose."

Other banks such as Westpac and National Bank operate their own points schemes.

National Bank spokeswoman Cynthia Brophy says her bank operates a program called "Prestige Plus which awards points on a referral basis to a number of parties, such as real estate agents, accountants and solicitors." The bank’s staff aren’t involved in the referral program, Brophy says.

Westpac spokesman Paul Gregory says it offers real estate agents the possibility of earning "Hot Points" in exchange for referrals. The points can then be redeemed for gift vouchers.

"What we do have in place (and I'm told it's not widely used) is something our mobile mortgage managers run which is essentially a relationship-building tool for key referral sources (these may include land agents)," Gregory says.

ASB Bank head of retail banking Barbara Chapman says it also has an intermediary referral system based on completed loan deals, but that she doesn’t wish to disclose the details of the payments offered for competitive reasons.

"Our arrangement fully complies with the Secret Commissions Act," Chapman says.

ANZ spokeswoman Cathy Wood confirms her bank also pays for referrals.

"Real estate agents can receive a cash payment from ANZ for a successful referral. The agreement notes that the commission must be disclosed to the customer," Wood says.

« Pero shares down after first day of listingHousing still booming but less frothy »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build ▼4.94 - - -
AIA - Go Home Loans ▼7.49 5.99 5.69 5.69
ANZ ▼7.39 ▼6.39 ▼6.19 ▼6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼5.79 ▼5.59 ▼5.59
ASB Bank ▼7.39 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 ▼7.54 - - -
BNZ - Rapid Repay ▼7.54 - - -
BNZ - Std ▼7.44 5.99 5.69 5.69
BNZ - TotalMoney ▼7.54 - - -
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 ▼6.95 5.99 5.75 5.69
Co-operative Bank - Standard ▼6.95 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 ▼6.65 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 ▼7.25 6.89 6.59 6.49
Kiwibank - Offset ▼7.25 - - -
Kiwibank Special ▼7.25 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 ▼8.19 6.49 6.49 6.49
TSB Special ▼7.39 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 7.64 6.02 5.79 5.69

Last updated: 27 November 2024 9:50am

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