New Zealand manager Peter Anderson says Pioneer is increasing the upfront commissions it pays from 0.60% of the loan value to 0.65% for brokers who write a minimum of $10 million a month in loans with it.
It also pays between 0.15% and 0.25% a year for each year the loan stays on its book, depending on volume.
"We're saying that we're committed to the broker relationship. We're being favoured increasingly and we wanted to reflect that," Anderson says.
Pioneer also supports the New Zealand Mortgage Brokers Association position that borrowers receive added-value in their dealings with brokers, he says.
National Bank is increasing upfront commissions from 0.55% to 0.75% of the loan value from June 1 and will stop paying trail commissions altogether, currently 0.2% of the loan value a year.
The move follows Westpac's decision last September to tighten its clawback conditions for loans that didn't stay on its books long, reduced trail commissions for the first five years a loan stays in force but increased trail commissions on loans which last longer than five years.
Both banks have expressed concerns about falling profit margins and the costs of paying brokers.
In May 2003, Bank of New Zealand decided to stop dealing with mortgage brokers altogether.
"We are noting an increasing support from many brokers who have realised that they get no favours from the mainstream banks that immediately commence a marketing push to win over the client relationship," Anderson says.
Pioneer has been doing well, writing its best ever month in March and doing even better in April.
As for the size of its New Zealand book, "we're in our second half billion - it took us a while."
Whereas previously it tended to get "more complex investor-type applications and low doc applications," Pioneer is now getting an increasing number of "mum and dad" deals, he says.
