April 16, 2019 by Rebecca Crommelin
With all the news surrounding the Royal Commission, we wanted to make sure you understand what makes our team at Mortgage Choice in Perth CBD different to other brokers. We pride ourselves in ensuring we always put our customers’ needs first, and this is only further backed up by the way we are paid.
To understand the difference between Mortgage Choice brokers and other brokers, firstly we’ll explain how mortgage brokers are paid in general.
So how does a mortgage broker get paid?
When a mortgage broker settles a loan on behalf of a customer, they receive a commission from the lender. It’s important to remember that not all commission rates are the same for different lenders and payments may vary depending on the size of the loan.
Initially, the mortgage broker receives an upfront commission which is the payment acquired for introducing the customer to the lender. This is typically 0.3-0.5% of the total loan value.
As an example, for a $700,000 loan where the broker receives a 0.3% commission, this would equal approximately $2,100 for the broker’s upfront payment.
After the upfront commission, the broker receives an ongoing payment called a trail commission. This type of payment is a recurring commission that is calculated based on the outstanding loan amount each year, which is paid to the broker on a monthly basis. Trail commission is the outstanding payment of the upfront commission which is received by the broker as a deferred payment.
With different banks and lenders having varied commission structures, some mortgage brokers may be inclined to recommend a product to a customer based on the rate of commission they will receive – which could possibly put the broker’s best interests before the customers’.
How is Mortgage Choice different?
Mortgage Choice broker commissions are different to other brokers. All Mortgage Choice brokers are paid the same rate of commission regardless of which home loan is chosen from our panel of lenders. This policy ensures that we only ever recommend loan products that are best for you, meaning our clients’ best interests are always at the forefront from the start.
A note to remember
Our team of brokers at Mortgage Choice in Perth CBD have access to the same home loan deals being offered directly by the lender and will negotiate on your behalf to get you the best deal.
We work hard to research and find home loan options that are best suited to your unique situation and needs. Our focus is always on our clients to help put them into a better financial position, so you can trust that we always have your best interests at heart.
Book in with our experienced mortgage brokers today and feel confident knowing that we’re finding the right home loan that is best suited to you and your needs.
