Major changes to clawback policy
NATIONAL AUSTRALIA BANK (NAB) has updated its clawback structure for residential loans after completing a review of its clawback position.
Under the major bank’s previous clawback structure, NAB took 100 per cent of the upfront if the borrower refinanced away during the first year and 50 per cent if they refinanced away within 13–24 months after settlement.
For all new residential loans refinanced away from the lender after 1 September 2024, the following clawback structure will now apply:
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Zero to 12 months: 100 per cent
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13–24 months: Staged – drops every month by 4 per cent
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25 months onwards: 0 per cent
The major bank also announced it would amend its trail commission structure to 0.17 per cent in the first two years and 0.22 per cent thereafter.
It comes after majors Commonwealth Bank of Australia and Westpac both announced revised clawback policies in 2023.
NAB’s executive for broker distribution Adam Brown said: “The changes will fix a real pain point for brokers by improving the clawback structure and the refreshed, stepped commission rate will better align NAB’s products in market.
“These changes came into effect from 1 September 2024 and will apply to new residential loans settled after that time.”
Broker volumes break $100bn record
Mortgage brokers settled $100.11 billion during the June quarter 2024, a record volume, according to data from the Mortgage and Finance Association of Australia (MFAA).
Data commissioned by the MFAA and collated by CoreLogic research business Comparator found that the third-party channel settled 12.96 per cent more in June 2024 when compared to June 2023 quarter and wrote more than $100 billion in a quarter for the first time.
MFAA data also showed brokers wrote 73.7 per cent of all new residential home loans between April and June 2024, the second-highest proportion on record.
This figure was slightly lower than the record-high proportion recorded in the March 2024 quarter (74.1 per cent), but 6.5 percentage points higher than the market share recorded during last year’s June quarter (67.2 per cent).
Anja Pannek, MFAA CEO, said the data showed Australians are increasingly choosing brokers for support and guidance during a difficult economic climate.
“Mortgage brokers are working every day with their clients to help them get ‘finance’ ready and provide them with a wide range of choices on their home loans,” Pannek said.
78% of guarantee scheme places written by brokers
HOUSING AUSTRALIA has revealed to The Adviser that 78 per cent of all home buyers supported by the federal government’s Home Guarantee Scheme utilised brokers for their applications.
According to Housing Australia, a total of 43,800 first home buyers used a guarantee in the financial year 2023–24, or one in three of all first home buyers.
More participants are using the third-party channel, it said, noting that broker lodgements for the scheme increased from 50 per cent in the scheme’s first year of operation to 78 per cent in FY24.
Jennifer Chew, chief program officer of home ownership at Housing Australia, said the data highlighted the effectiveness of the scheme that provides incentives such as access to mortgages with lower deposits or removing lenders mortgage insurance.
“Amid rising living costs and housing affordability challenges, the Home Guarantee Scheme has supported thousands of eligible home buyers to navigate the market and achieve home ownership sooner,” Chew said.
Mutual merger will not proceed
A merger involving P&N and Beyond Bank will not proceed after being found to “not be in the best interests” of one of the lender’s members.
First announced in June 2024, the merger would have brought together the two customer-owned banks to create a much larger lender (with a combined book of around $20 billion).
However, P&N has now revealed that its due diligence process on the potential merger with Beyond Bank has concluded and the board has “determined that progressing the merger would not be in the best interests of its members”.
Details of why the merger will not proceed have not been disclosed.
P&N chair Gary Humphreys said: “While it’s disappointing that we will not be progressing this opportunity, our due diligence process was robust and I am confident that we have made the right decision.”
He said that the bank would continue to look to “grow organically and through mergers while always acting in the best interests of our members”.
Beyond Bank has also confirmed that the proposed merger will not proceed, but did not address the matter.
It said it was bound by confidentiality obligations in its memorandum of understanding, adding there would be no further comment.
