Beware mortgage broker commissions

‘Soft-dollar' commissions to mortgage brokers have been widespread in the industry but home loan borrowers are generally unaware of them. These can take the form of holidays, sponsorships for staff golf days and conferences, sporting event tickets, shopping vouchers and even office furniture. While there is now more control of these commissions, the Australian Consumers' Association (ACA) wants them banned altogether. The ACA says the commissions prevent brokers from giving independent, impartial advice. Consumers go to brokers expecting they will look around the market for them and find the best deals. But this is not the case. Brokers are more like the paid agents of the financial institutions. Not only are brokers getting disclosed commissions, they also get these under-the-counter rewards, the ACA says. Some lenders have moved to restrict the volume of loans arranged through brokers because of these commissions. What you should know before using a mortgage broker