ACA calls for revamp of niche lending commissions
The Australian Consumers Association has found that reverse mortgage and non-conforming lenders are paying more than triple the standard broker commissions in efforts to win market share. A survey conducted by ACA consumer research group Choice found that some lenders are paying upfront commissions as high as 2.5 per cent with trailing commissions reaching as much as 0.5 per cent. This is much higher than the average commissions paid for prime loans of between 0.6 and 0.8 per cent upfront and 0.2 to 0.3 per cent trail. The CEO of the industry organisation Senior Australians Equity Release Association of Lenders (SEQUAL) Kieren Dell said the higher commissions reflect the additional work required to sell a more complex product such as a reverse mortgage.