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Hot on the heals of the NAB’s decision to not raise it’s variable interest rate for home loans in line with the other Big Three (ANZ, Westpac and Commonwealth Banks), comes the announcement it is changing the way it is paying it’s mortgage brokers.
A different calculation will be used, based similarly on the mortgage interest offset model that lending customers enjoy.
From November 2018, the mortgage broker will receive the commission based on the amount of the borrowings actually drawn down at the initial draw down of the loan and not necessarily the total amount of the borrowing (lending) facility.
If a customer borrows $400,000 and has $100,000 left over for future use ie renovations, extensions, etc – and deposits the $100,000 into an offset account (effectively having the interest calculated on $300,000 – the broker under the new policy would only receive a commission on the $300,000.
Trailing commissions are not being axed.
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