Independent, professional and reputable, friendly and approachable.
Those are some of the key attributes being ascribed to mortgage brokers, says KPMG, and are the reason for their increasing use.
KPMG's latest annual Financial Institutions Performance Survey, released earlier this week, says that mortgage brokers are now fully accepted by the retail banks and viewed as another important distribution channel. It says that the commissions paid by lenders to brokers are mainly up-front and are 60 to 70 basis points of the amount drawn down, subject to a cap amount.
ANZ Bank provides trailer commissions (approximately 15 basis points), and KPMG says that's viewed positively by mortgage brokers. It says that trails, which pay the broker over the life of the mortgage, are used more extensively in Australia and are expected to become more common here.
While last year's KPMG survey gave figures for mortgage broker use - they originated some 17 per cent of loans in 1998, up from 7 per cent two years previous - chairman of the firm's Banking and Finance Group Andrew Dinsdale said those figures couldn't be compiled this year as only one lender would provide data.
However, the survey says that, for some banks such as AMP Banking, mortgage brokers were certainly a major source of new lending. "ANZ Bank, WestpacTrust and ASB Bank are also viewed as using mortgage brokers extensively."
The fact that brokers were seen as approachable also pointed to banks becoming more distant from their customers, KPMG says.
