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Westpac announces commission changes and new incentives

Westpac general manager mortgage distribution Tony MacRae said the bank would be making recent trial changes to its commission structure permanent, as well as introducing new incentives.

Video transcript below:

Tony MacRae, Westpac
Tony MacRae:
 As part of Westpac’s commitment to growing the mortgage market, I am delighted to be able to confirm today that we are putting in place permanent changes to our commission structure.  So you will be aware that we had a 10 basis point volume incentive in place for the last six months.  We are going to put that permanently in place, but on top of that we are also offering brokers an additional 5 points if they meet conversion hurdles.

Reporter:  McRae says that the motivation behind this new incentive was to demonstrate that Westpac are in it for the long haul.  Recognising the valuable part brokers play in introducing customers in the buoyant housing market.  And the bank has more initiatives in store to strengthen its relationship with the broker channel.

Tony MacRae:  Really excited.  I think this is an industry first.  We have been looking at our portfolio of mortgage customers and particularly the broker introduced customers and there is whole list of customers that have been with us for sometime now.  And those customers have run down the size of their debt and are now eligible to get top ups if they want to do renovations or might be able to another loan.  And so in February, we are going to start passing out leads to brokers, so that they can talk to those customers knowing that they are eligible to be able to get additional lending from Westpac.

Reporter:  MacRae says that with about half of customers choosing to deal with brokers, the third party channel is an undeniably important ingredient in the overall mortgage growth proposition.  MacRae predicts further strong competition between lenders to attract both brokers and consumers and says Westpac will be doing its part to remain attractive to borrowers.  

Tony MacRae:  Yeah, that’s why from Monday the 3rd of Feb., we will be looking out to introduce some new discounts off our SVR on our premium advantage package.  So for deals between 250 and 750, there will be an automatic discount of .9% and then for deal over 750,000 there will be a 1% discount for customers for new lending.