You need to be outraged … the Royal Commission WILL affect you.
The banks have got away with it again, and you, the consumer, are going to made to pay – through your home loan.
This is how;
On a $300k home, the bank makes $6,000 in clear profit the first year alone. and every year to follow.
On a $500k home loan, that’s $10,000 clear profit EACH YEAR.
Mortgage Brokers account for nearly 60% of mortgages in Australia, by substantially increasing the competition among the major banks. Before the advent of mortgage brokers, the clear profit banks were making on a $300k and $500k home loan were $12,000 and $20,000 respectively.
Home loans make MASSIVE profits for banks – brokers have halved that profit and banks hate that!
Until now, out of that clear profit, the bank pays all the set up costs for your home loan – of which ONE cost is your broker.
The Royal Commissioner has decreed that YOU the consumer must now pay the all of set up costs – which are considerable – in the interests of consumer “transparency”.
Politicians are buying into it too, with Labor pushing to make the changes “effective immediately” and the Liberals set to move to a consumer paid model within three years, banning trail incomes by June 2020.
This is outrageous. The bank makes the money – the bank should pay to set up the loan.
It is outrageous that they get to offload this cost to you AND keep all the profit to cover all the other things they have been found guilty of in the Royal Commission.
The banks would love mortgage brokers to disappear, less competition means higher rates and higher fees, business will again be dominated by the major banks and consumers will be hit with the lot – you cannot let that happen.
The Royal Commission got this horribly wrong – in trying to protect the consumer it is going to punish you instead.
You have to let your MP know that you will not pay.
As always if you’d like to know more or to get advice tailored to your own personal circumstances, just Ask Alan – Your online mortgage broker.