What’s a trailing commission and how does it work?

Right now, there’s a fair bit of discussion about commissions and how they work. I want to demystify this so you know why I’m paid my trailing commission.

My job is to look far and wide and negotiate hard for a lender with a competitive loan for you.

I’m paid two types of income:

  1. A one-off payment called an upfront commission usually between 0.65% to 0.7% (+gst).
  2. A trail or ongoing commission usually 0.15% p.a., based on how much of your loan is left at the end of the year. 

These reward me for the hard work I’ve done finding your loan and keeps me focused.

Loan Market has strict processes to keep a close eye on us brokers. If I referred you to a loan just because it would earn me more, I’d probably lose my right to practice. Simple as that!

And let’s be crystal clear. I work for you—not the bank. Always have, always will.

Here’s what I do for my trailing commission:

  • Securing finance: As banks tighten their loan policies, getting credit can be trickier than storing ice in the desert. But I’m not limited to the rates and conditions of the Big 4. My panel of lenders can help you get the most competitive home, car, business or personal loan.
  • Refinancing*: I keep one eye on the market and one on your loan. When I spot a more competitive deal, I’ll help move you over.
  • Repricing: Changing lenders is tougher in a tightening credit market. But there are often options through your existing lender and I can often get a more competitive deal. It’s quick and means I can still help you with things like increasing your loan.
  • Better utility prices: Through our partners Loan Market Home Now, we’ll take your gas, electricity and internet bills and compare them against Australia’s leading brands on our panel to find you a better deal. We can potentially save you $882 a year on household running costs**. Go here for more.
  • Annual review: At your request each year, I can run a ruler over everything, to be 100% sure your goals and ambitions are being met by your loan. Renovation, baby on the way, upsizing? I’ll find the right loan to work for you.
  • I keep you in the driver’s seat: I can connect you with our financial planning partners, for everything from insurance, budgeting, super and estate planning. It’s important you have a plan to cover the mortgage, if something unexpected happens.

So yep, I do all that and more. Would a bank? If you want to find out more about these services, drop me a line.

*subject to lender terms and conditions.

*Average annual savings from bills received from Nov 2018 to Feb 2019.