Trail commissions introduced

Propertyfinance chairman Barney Sundstrum said the company had researched the market carefully and it was clear that long-term relationships with brokers, characterised by trail commissions, are critically important.

"Mortgage brokers in New Zealand currently originate a much smaller percentage of home loans than countries such as the US and Australia. Less than one in three mortgages in New Zealand is originated through a broker, giving significant opportunity for growth," Sundstrum said.

Propertyfinance Securities is looking to take its Headstart and No Nonsense business from $50 million today to $175 million within 12 months with associated benefits for the Company. Headstart is designed specifically for first time home buyers, and No Nonsense for the self employed.

"We are determined to realise this growth opportunity by working with brokers to develop long-term partnerships and become the mortgage provider of first choice."

The new trail commissions will see brokers earn between 0.2% and 0.4% on the value of mortgages outstanding.