Advisers angered by new BNZ pricing conditions
BNZ has introduced new pricing conditions for the broker channel and will no longer guarantee mortgage rate offers during their five day validity period.
Friday, September 24th 2021, 8:33AM 
4 Comments
The big four bank moved to new pricing terms last week. The new rules mean that pricing offers made by the lender can be changed if rates move during the five day validity period.
The change has already caught out some clients who have agreed mortgage rates, only to see them changed by the bank to higher pricing.
BNZ, like its rivals, has hiked rates over the past few weeks, meaning several advisers and clients have been impacted by the new model.
Fixed rates have increased across the board ahead of the Reserve Bank's expected OCR hike early next month.
One adviser told TMM Online that they had received pricing from BNZ for a restructure on a Friday, and were given a five day validity period, only to be told they would be moved to a higher rate on Monday.
"It essentially means that any conversations that we have with the client about how to structure lending under the new responsible lending practices is immediately invalidated because the rates increased by 30 points, even though we had a five day offer in place.
"The offer isn't worth the paper it's printed on. So the question is, is this something that is acceptable practice by a lender?"
The new pricing conditions have drawn a furious backlash on social media, with several brokers hitting out at the bank on Facebook.
Brokers called the policy "false or misleading", "shocking", and "deceptive", while one accused BNZ of "moving the goalposts".
Some advisers are believed to have complained to the Banking Ombudsman about the new policy.
Advisers told TMM Online that the changes have led to additional work as brokers are forced to re-engage with clients to discuss the higher rates.
A BNZ spokesman said the policy change was made to bring brokers in line with other BNZ customers.
"Last week we brought broker channel pricing conditions into line with those in the rest of our channels. This provides consistency for customers no matter the channel they choose to do business with us," the spokesman said.
"Pricing is subject to change, but if a customer wishes to lock in a particular rate and term they should consider a Ratelock."
The spokesman added: "New customers need to be unconditionally credit approved, but existing customers can get one [a Ratelock] as long as it’s within 60 days of their current term maturing."
Advisers dismissed the comments and said BNZ was putting advisers under pressure to lock in rates straight away, giving them little time to discuss the deal with clients.
"They're basically saying, we'll give you this rates offer, but if you don't take it straight away, there's a likely chance that it's won't be valid if you don't come back within five days."
"They could give you an offer on a Monday morning, and if the rates change on Monday afternoon, it's gone. So, it gives us no time to discuss anything with the clients."
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Comments from our readers
BNZ have a proven track record of being anti-broker offering things direct that aren't available via the broker channel i.e. pre approvals above 80% borrowing that are currently a "red light" to mortgage brokers but available via BNZ branches and the BNZ home loan direct line. BNZ simply don’t value the broker channel the way that other lenders like ANZ do.
As for Westpac's latest gaffe of offering superior interest rates now to mortgage broker customers that we are unable to match ourselves this is clearly all part of a two part strategy to sever the customer's relationship with their broker 1) educate the customer not to go back to their broker to renew their interest rates and then 2) offer them a pre-approved home loan top-up of $10,000 post-Christmas to consolidate short term debt etc. which thus means the relationship has changed back to the customer dealing with Westpac directly and the broker's eligibility for their trail commission ceases. Make no doubt about this folks, this is a deliberate move by Westpac to reduce the amount of trail they are having to pay on mortgage broker originated home loans.
As an industry we simply cannot allow Westpac to introduce this new policy above as we failed miserably a few years back to stop Westpac increasing claw back periods from 18 to 24 months and look where we are now with some banks going out as far as 27 & 28 months. Collectively we have the power to vote with our feet and shift our business to competitor banks which mind you should be happening already given that Westpac has the least flexible extra repayment policy on fixed rate home loans of any main bank lender. My group tells me that applications to Westpac were already dwindling so Westpac’s move now to seemingly antagonize mortgage advisers would have to be one of the dumbest moves by a main bank that the industry has seen. The new incoming Westpac CEO looks like she will have her work cut out for her in changing what appears to be a very dysfunctional culture now within the current Westpac third party banking team when it comes to them wanting new business from mortgage advisers.
Westpac like the ASB are not allowing their home loan customers the opportunity to access independent advice from their mortgage adviser around an appropriate home loan structure when it comes time to refix their loan’s repayments. This is especially important in a rising interest rate environment like we are experiencing now. Perhaps Phil you and the Good Returns team can have a good chat to the FMA about whether they think main bank lenders who behave like this are still compliant with their obligations under the responsible lending guidelines that all lenders must adhere to? I think I already know what the FMA will say about this….
So in conclusion if you are a mortgage adviser who is currently supporting either BNZ or Westpac with business it's your decision as to whether you think this is still a wise move going forward. Personally I’d rather endorse a lender who actually cares about customers and them being able to access independent advice from their mortgage adviser.
Retired Banker
True. But when it comes to ASB at least I think you will find the Gold there now has diminished significantly.
I fully expect that some of the banks next year will go back to having long periods of them not being able to pre-approve home loan applications above 80% even for their existing customers. We are nearing closer and closer now to the extra bank capital holding requirements being introduced into law by the Reserve Bank in July 2022.
For some of the banks to keep lending now it's all about capital or should I say lack of.
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Let’s think about this for a moment, in good faith advisers bring new business to Westpac with the adviser having a strong relationship with their client, at the fixed rate roll over time Advisers goes to Westpac for new interest rates for their customer so they can then have a discussion with their client giving them great advice and the customer can make the best-informed decision possible about their mortgage lending going forward into the future.
Advisers locks in an interest rate for the client, but wait! , client confirms they have just seen a better interest rate offered to them via their internet banking , the discount is better than what third party banking can do and better than any advertised specials , all the client needs to do is click to accept online with no advice given, that’s right not one peace of advice given around rate term , loan term ,repayments personal circumstances , future plans ,etc etc.( how embarrassing for the adviser ).
ASB also now only offer new interest rate pricing direct to customers online (no advice) as they said this is what customers want but that’s not actually accurate, advisers get calls all the time from Customers wanting help /advice on what to do next with their mortgage loans, some are confused /’stressed /panicking, it’s a huge decision to make especially in a rising interest rate environment and most customers do not want to just click on line and hope for the best.
Drawing customers toward accepting a better pricing tier online will no doubt save banks money as the “Human contact” element of the transaction has been taken away but is this “Responsible lending “?
And why try and cut advisers out or sever the adviser /client relationship? advisers only to trying to give the best service and advice they can by having the customers best interests at heart and can keep these relationships for 5,10, 20 years.
Westpac have not communicated to advisers that they now have a two-tier pricing system for Customers which is interesting in itself, where are the dealer groups on this? are they doing nothing, just now concerned about their insurance overrides, possibly, silly me thinking groups were “mortgage aggregation “ / support , times have changed .