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Mortgages

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The mysterious fee case

A number of mortgage brokers are convinced that Southland Building Society (SBS) charges their clients a fee for home loans that it wouldn’t charge customers who approach the building society directly, but SBS insists this isn’t the case.

Tuesday, October 19th 2004, 10:15PM

by Jenny Ruth

Paul Atkinson, SBS’s retail general manager, says customers coming to his organisation through a mortgage broker aren’t treated differently from other customers.

However, he does acknowledge that SBS would prefer to deal with customers directly rather than through a mortgage broker.

"If you attract customers through third parties, it makes it very difficult to develop a long term relationship," he says.

He says SBS advertises that it charges 0.5% of a loan up to a maximum of $1,200 as an application fee but that individual staff members have the discretion to waive this fee.

If a customer is bringing a full banking relationship to SBS, the staff member could waive all fees.

Atkinson declines to say how many of SBS’s customers are charged fees. "It depends on the relationship they’re bringing to us," he says.

Atkinson says that, unlike most banking institutions in New Zealand, SBS is owned by its customers. "We’re not an overseas bank."

About 20% of SBS home loans are originated from mortgage brokers compared to brokers’ overall market share of between 25% and 30%.

Atkinson says he’s aware of one incident of a broker’s client being told they wouldn’t have incurred fees if they hadn’t dealt with a mortgage broker. That client was given incorrect information, he says.

SBS isn’t anti-mortgage brokers, he says. " They’ve got a job to do. They’ve got a place in the market. We have no difficulty with mortgage brokers."

While SBS has a number of localised arrangements with mortgage brokers, the only national aggregator it has an agreement with is Mortgage Link. "We have many, many individual agreements with brokers which we work with locally. They’ve established quite strong relationships with the local branches," Atkinson says.

A number of mortgage brokers report having been told by their local SBS representatives that their clients will be charged an additional fee, "Any brokerage paid will be on-charged to the customer, without fail," one mortgage broker reports his local SBS representative as having told him.

Given that situation, Good Returns asked why that mortgage broker would ever place a client’s home loan with SBS. "They’re a lender of last resort. They will lend where there are credit issues or where the loan is difficult," one broker says.

« Home affordability slipsConfusion abounds on mortgage rates »

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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 8.90 7.00 6.50 -
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 ▼6.39 ▼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 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼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 6.17 5.79 5.69

Last updated: 30 October 2024 9:36am

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