The way the commission is calculated will also be disclosed in some customer loan documentation under the new arrangements.
For example, the broker will be paid full commission if the borrower with a $500,000 home loan draws down the full amount with no funds in the offset account.
But 50 per cent of the commission will be clawed back if the borrower repays the loan between 13 and 24 months.
Commission structures for top up, equity access, relocation, bridging and construction loans remain unchanged.
From January 1, brokers will have access to priority arrangements for their customers if they “consistently satisfy” quality loan application criteria.
There is no requirement for brokers to meet any dollar-volume threshold to access the new system.
Called “priority broker support”, it will classify brokers as either platinum, gold or accredited.
To qualify for platinum a broker must make at least 12 submissions a year with an 85 per cent accuracy rate in the details it provides about the applicant, their savings, income, liabilities and expenses, and completing contract of sale.
Bank incentives for the broker include “superior service”, faster assessment and approval times and, for platinum members, access to credit policy experts who can “discuss customer scenarios and receive advice”.
For example, platinum brokers will have their applications assessed within 24 hours.
“All changes we are making are in line with the recommendations from the CIF,” the bank is telling brokers. “This will ultimately be better for customers and the industry as a whole.”
The bank recently introduced much more demanding scrutiny of borrowers’ capacity to service their loans under the regulator’s “responsible lending” measures.
Other lenders are expected to review incentives for brokers who use enhanced mortgage approval as a marketing tool to attract and retain clients.
The big four’s use of mortgage brokers ranges from about 56 per cent for ANZ to 42 per cent for National Australia Bank. CBA’s broker network accounts for about 43 per cent, according to Morgan Stanley.
The changes come as the Productivity Commission, corporate regulators and banking royal commission are questioning whether borrowers should pay a fee to brokers rather than higher interest payments to lenders.
Royal commissioner Kenneth Hayne, QC, has questioned whether brokers do more work on a larger loan than a smaller one to justify a bigger upfront commission and senior bank managers have been asked why lenders did not provide more detail.
A mortgage broker who arranges borrower finance will receive an average upfront broking commission from lenders of about 0.6 per cent of the loan value and a trailing commission of just under 0.2 per cent of the loan outstanding every year over the life of the loan, according to the Productivity Commission.
That amounts to a mortgage advisory fee of about $6000 for the mortgage of an average loan of about $357,000, according to the commission.