57% won’t use CBA if commissions scrapped

by Rebecca Pike06 Dec 2018

More than half of brokers have said they will cancel their accreditation with Commonwealth Bank of Australia (CBA) or avoid using the lender unless necessary, if the fee for service model comes into play.

This is according to mortgage marketplace HashChing, which surveyed a cross-section of its brokers on a number of topics, including CBA CEO Matt Comyn’s recommendations during the Royal Commission.

The research found that 57% of brokers would not use the bank, either by cancelling their accreditation or simply not using them.

Twenty-seven percent said they would continue business as usual and 15% said they would turn to additional revenue streams to ensure future sustainability.

Saying it was “no surprise”, HashChing CEO Siobhan Hayden backed brokers as a “free resource”.

She said, “Brokers are a free resource for consumers and one that they should absolutely take advantage of. The difference between using a broker and going straight to the bank can be hundreds of thousands of dollars over the life of the loan.

“Those who seek help are also likely to develop a more strategic approach to managing debt in general and stand a better chance of securing home loan approval in a market that has more restrictions than ever before.”

Other research from the survey showed that almost half of brokers agreed with Morgan Stanley’s forecast of house prices dropping nationally by up to 15%.

More than a third of brokers said they had noticed an increase in the volume of clients asking about refinancing in the lead up to Christmas.

Only 7% of brokers said they had noticed an increase in retirees asking about initiatives to access the equity in their homes.

Hayden added, “In a context of growing household debt, the fact that so few retirees are looking at ways to access the equity in their home suggests that many are either unaware of the opportunity, or simply have too much debt to capitalise on it.

“A home equity loan can be used to consolidate debts and achieve a lower interest rate. In some cases this can give retirees the room they need to develop a manageable payment plan, without the stress of high interest rates that they agreed to while in full-time work.

“On the other hand, it is even more important that those who do not have equity in their home work with a broker to develop a clear strategy.”