The bank’s campaign has run under the logo: "We’ve cut out brokers to give you a great home loan deal".
"It’s inherently dishonest for the BNZ to say that, because they’re not paying brokers, they can offer that rate” Mortgage People managing director Carey Brunel says. “If that was the case, it should be 0.6 or more percentage points lower."
Most banks pay upfront commissions between 0.6% and 0.8% of the total loan amount and many pay on-going trailer commissions on top of that.
"They’re putting themselves up as a pillar of honesty in the community but they’re perpetuating a lie against the broking industry," Brunel says.
Miranda Caird, managing director of Mortgage Choice, has a similar view. "It’s misleading the public. How do each of those employees get paid? Everything comes out of margins.
It’s not any more expensive than walking into that branch network," Caird says.
And BNZ’s rates haven’t been the cheapest in the market.
HSBC has equalled them has been offering to pay up to $1,000 towards legal fees, depending on the size of the loan.
Mortgage Link chairman Ross Butler points out that all the other major banks do deal with brokers and have very sophisticated systems to measure the cost of distribution.
"Why is it the others have got it so wrong? I don’t think they have. The costs of distribution are comparable right across the spectrum. If you’re not dealing with a mortgage broker, then you have the cost of your mobile lenders.”
He suggests the cost of salaried staff is more expensive than broker distribution costs.
