Change will help brokers manage cashflow, says distribution head
Westpac has announced a reduction to the clawback period for broker commissions in situations where loans are refinanced to a different lender.
Effective from August 1, 2023, the bank has confirmed that the clawback period applying to all Westpac consumer mortgage home loans will reduce from 24 months to 18 months.
The rules will be applied retrospectively for Westpac consumer home loans settled from February 1, 2022, the bank said.
For loans closed 18 months and over, clawback will no longer apply. The clawback for the first 12 months will remain unchanged at 100%.
Westpac head of broker distribution Warren Shaw (pictured above) said that the bank valued the role that brokers play and as such, had backdated the change to apply from February 1, 2022.
“Brokers play an important role in our business, and we’re pleased to be making this change to better support them,” Shaw said.
“As well as reducing our clawback structure we’re applying the changes retrospectively, which is a great outcome to help brokers manage cash flow.”
On July 6, big four bank CBA announced a change to clawback rules for all new applications submitted on and from October 1, 2023. While the first year clawback would remain unchanged, Commonwealth Bank said that the remaining 50% would be paid out over the second year. A monthly gradual straight line approach will see the clawback percentage continue to reduce every month until month 24, CBA said.
In view that clawbacks represent a cost to brokers, Mortgage Ezy announced on Tuesday that it would extend no clawback rules to 28 offerings within its product range.
