This is the second round of cuts to be faced by the mortgage broking industry in less than three years; banks earlier stopped paying trail commissions.
In a statement, ANZ said: " The mortgage broker channel is an important one for ANZ and we remain committed to it, but it needs to be sustainable and profitable for all parties". ANZ said that from 1 October, commission would be up to 65 basis points depending on volume. The rate would be effective for loan applications submitted from 1 October 2007.
National Bank, part of the ANZ group, said: "We can now confirm that our broker commissions will be up to 70 basis points, depending on volume, for all loan applications received from October 1 2007."
The latest industry move on commission was lead by a proposal from ANZ earlier this year. The original plan was postponed after an outcry from brokers and intervention by the New Zealand Mortgage Brokers Association. This lead to further discussion between broker groups and ANZ.
Banks say that commission reductions are essential because profit margins on mortgage business have dropped dramatically.
Many non bank lenders have continued to pay trail commissions and were seen by some brokers as potential new business partners as the main banks cut payments. But non bank lenders are also feeling the squeeze.
Sovereign began consulting brokers groups in August but has deferred a decision following feed-back from brokers. It will be reducing discounts on some products from 1 October.
Malcolm Aston – National Sales manager home loans at Sovereign says "There is more than one way to resolve margin issues, not just reduce commission. We are committed to working together with advisers to ensure that we both have a profitable and sustainable business going forward."
