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Brokers unhappy with National Bank

National Bank's decision to stop paying mortgage brokers trail commissions from June is likely to be counterproductive, says New Zealand Mortgage Brokers Association chairman Geoff Bawden.

Friday, April 15th 2005, 5:19AM

by Jenny Ruth

The bank's reason for cutting trails is the effects of reduced interest margins on fixed interest rate loans. Bawden says cutting trail commissions doesn't address this problem and could potentially have the opposite effect because it will encourage churn.

Discouraging churn was the reason National's parent, ANZ Bank was the first to introduce trail commissions.

"It's almost like saying (to the broker), we don't want you in this relationship long term, go away. That's not in the long-term interest of the customer and personally, I don't think it's in the long-term interest of any bank," he says.

The reason brokers have gained so much of the market is because they have filled a gap in terms of providing customers with a personal relationship that they can't get in the banking environment, he says.

The NZMBA thinks a more sensible approach to improving profitability would be for all interested parties to work more closely together to find ways to streamline and cut the processing costs associated with broker origination and to increase the industry's skills.

"We know that only about half the submissions made reach loan settlement and the cost savings that could be achieved by working together to improve productivity would be substantial," the NZMBA says.

It is also disappointed that it hasn't been included in the consultation process. National Bank spokesman Robert Reid says his bank will be briefing the NZMBA on the consultation process after it has been completed and the contractual parties have been fully informed.

"We believe that this is the correct process to follow," he says.

« National Bank to cut trail commissionsHSBC continues to lose mortgage market share »

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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 ▲8.15 ▲6.79 ▲6.45 ▲6.29
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 ▼8.10 ▼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 6.24 6.09 5.69

Last updated: 1 November 2024 2:24pm

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