'Sticky' loans better for everyone: NMB

by Caroline Dann08 Aug 2012

A leading aggregator representative is claiming ‘sticky’ loans due to rate for risk pricing are better for everyone by increasing broker trail commissions, fostering client loyalty and keeping lenders happy.

Kon Avramidis, general manager of operations at National Mortgage Brokers told Australian Broker Online there weren’t enough rewards for loyal, low-risk borrowers.

“Pricing on risk is a win/win for both client and lender. The client is rewarded for their prudent approach to borrowing, while the improved quality of the lender’s mortgage book can mean more favourable investment terms and keep the regulators at bay,” he said.

While he admitted “banks don’t like it when people pay off loans early,” there were hidden benefits in encouraging timely payments and discouraging lender switching.

“If you miss a repayment, there’s a process that’s triggered, involving reminder notices, phone calls, paperwork – it’s very time-consuming.”

As for brokers, he believes trail commission will benefit greatly from borrower loyalty. “It can only be a good thing,” he said.

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New loyalty scheme 'benefits trail income'