This Commissions Guide article relates to CBA Residential loans. Articles related to other CBA products can be found here:
Connective will maintain this guide to the best of its ability but cannot guarantee that the information within is complete, and/or in line with the latest guidance and policies of the lender. If you believe anything is missing or inaccurate, please contact us.
Contents:
Commission Rates
Upfront Commission: New Home Loans from 8th May 2018 (Plan A)
Commission | ex GST | inc GST |
Upfront (Home Loans) | 0.65% | 0.715% |
Upfront (Line of Credit) | 0.4875% | 0.53625% |
Trail: Year 1 - 3 | 0.15% | 0.165% |
Trail: Year 4 + | 0.2% | 0.22% |
Plan A applies to all brokers, unless prior to the 8th May 2018, a broker selected Plan B, in which case Plan B will continue to be paid to a broker.
Where a broker selected Plan B prior to 8th May 2018, they may select a change to Plan A, in which case the change will come into effect as follows: Where CBA process the change request on or prior to the 20th of a month, Plan A applies to new funding’s from the 1st of the next calendar month. Where CBA process it after the 20th of a month, Plan A applies to new funding’s from the 1st of the second following calendar month.
Once a change has been made to broker’s Commission Plan, no further changes are permitted.
Notes & Definitions
Total Commissions: means the aggregate of Upfront Commission, Trail Commission and Referral Services Commission.
Total Upfront Commission: means the aggregate of Upfront Commission and, where applicable any commission allowances.
Referral Services Commission: means commission payable in relation to the establishment of products under the CONNECT Referral Program.
New Money: Means the difference between (a) The total loan amount or credit limit proposed to be borrowed by a client; and (b) The amount of any existing debt owing on any current CBA residential mortgage home loan or other loan product secured by a mortgage over residential property and which is intended to be repaid by the proposed Home Loan or Line of credit product. Where the existing product being repaid is a line of credit, the amount of existing debt is taken to be the higher of the amount owing and the credit limit.
Top Up: Means, in relation to a product, an increase in the loan amount or credit limit of existing loan or facility by way of any New Money.
Upfront Commission is calculated based on the drawn down loan balance net of any linked offset account and redraw facility, not on the total New Money.
CBA pay commission on the following Commonwealth Bank or CommSec Branded products:
Standard Variable Rate Home Loan (including No Fee Variable Rate Home Loan, 1 Year Guaranteed Rate, 12 month Discounted Variable Rate and under Mortgage Advantage (MAV) conditions.
Standard Variable Rate Investment Home Loan (Including No Fee Variable Rate Investment Home Loan, 1 year Guaranteed, 12 month Discounted Variable Rate and under Mortgage Advantage (MAV) conditions.
Extra Home Loan Owner Occupied and Investment Loans.
Extra Home Loan (introductory Rate) Owner Occupied and Investment Loans.
No fee Variable Home Loan Owner Occupied and Investment Loans.
Rate Saver Home Loan (including 3 Year Special Rate Saver) Owner Occupied and Investment Loans.
Fixed Rate Home Loan (including Mortgage Advantage (MAV) conditions Owner Occupied and Investment Loans.
Viridan Line of Credit – Residential Equity Rate (including Mortgage Advantage (MAV) conditions.
Clawbacks
When loans are externally refinanced or repaid for any reason, commission clawbacks will be made in accordance with the Schedule Below.
Period | % Upfront Clawback |
0 - 12 Months | 100% |
13 - 18 months | 50% |
When a loan is refinanced by another CBA Business Unit or the customer directly requests to refinance or transfer to another CBA Business Unit, CBA at their absolute discretion (provided that CBA used their best endeavours to refer the customer back to the broker) CBA may apply the following clawback provisions:
Period | % Upfront Clawback |
0 - 6 Months | 100% |
7-12 Months | 50% |
Clawback will not apply where the customer experiences hardship, and assistance is provided under the Repayment Alert Program and this leads CBA to refinance or restructure the loan.
Clawback on Partial Repayments
If, CBA pay Total Upfront Commission in relation to any Banking Product which is secured by a mortgage over residential property/ies; and within 12 months of the first disbursal, the loan or line of credit, in respect of which commission was paid, is partially reduced due to the proceeds from a property sale, broker must refund a proportion of the commission paid to the broker, being the same proportion that the repayment amount relates to the loan amount/credit limit on which CBA paid commission (subject to any deduction for amounts refinanced and amounts they did not pay commission on).
Clawback on Subsequent Utilisation of Funds
Clawback will not be applicable for any funds deposited back into linked offset accounts
Offset/Utilization Rules
Announced on 10th July 2019, they will pay commission on subsequent utilisation of funds of $20,000 or more.
Additional upfront commission will be paid on the twelve-month anniversary of the loan for subsequent utilisation of funds from a linked offset facility (Everyday Offset (EDO), MISA or Redraw).
Additional upfront commission for subsequent utilisation of funds is applicable to all eligible loans funded under the net of offset model from 24/11/2018. This commission will be paid on the commission cycle following twelve-month settlement anniversary of the loan. In real terms, the first eligible additional upfront payment would be in January 2020 as loans funded between 24 November 2018 and 31 December 2018 were fully adjusted via an exception process and already paid in full up to a maximum approved amount.
Additional upfront commission on subsequent utilisation of funds is calculated as the difference between linked offset facility balances on day 14 (closing balance) and the average linked offset balances (daily) from day 15 to the twelve-month settlement anniversary of the loan.
Construction and Viridian Line of Credit (VLOC) loans are not eligible as they are not included in the net of offset model and are paid the full approved amount upfront.
General Terms Applicable to Commissions
From 24th November 2018, CBA will pay upfront commission based on the drawn down loan balance net of any linked offset account and redraw facility (not on the total approved loan amount) 14 calendar days after the date of drawdown.
For Construction loans that settle from 24/11/2018, upfront commission will be calculated on the total approved amount. Construction loans will be excluded from the net offset balance calculation.
CBA may reduce the Total Upfront Commission rate where the New Money equals or exceeds $3,000,000.00
For the purpose of calculating Trail Commission, the Balance Outstanding is: (a) the net balance of the home loan account (including any additional advances made under a Top Up or Product switch) as at the end of the month (b) less the credit balance as at the end of that month of any Mortgage Interest Savings Account (MISA) and/or Everyday Offset Facility which is linked to the home loan on which trail is being paid.
Trail Commission will not be paid to a broker when:
A loan is in arrears 60 days or greater. Should those loan accounts that did not receive trail due to this clause be in order, prior to the end of the respective trailer month, trail commission will recommence at the next date for the payment of commission. There will be no back dating of trail commission covering the period that trail was not received, for those loans.
Loans or facilities in excess of their limit. Should those loan accounts that did not receive trail due to this clause be in order, prior to the end of the respective trailer month, trail commission will recommence at the next date for the payment of commission. There will be no back dating of trail commission covering the period that trail was not received, for those loans.
Loans that are refinanced under or transferred to another Commonwealth Bank Business Unit as a result of a customer-initiated request
Loans that are refinanced or switched to a different product type by another aggregator group or the broker of another aggregator group
Loans that are repaid
Loan that are refinanced by an external lender or party
The first trail commission payments on new loans or new money will commence from date of settlement.
If a broker does not hold an Approved NCCP position CBA may suspend payment of commission.
Commission will not be paid where a broker submits an application for a loan or Top Up through a channel other than the Third-Party Banking Channel or the application is approved by an area other than the Third-Party Banking Channel.
CONNECT Referral Program
Brokers will automatically be registered to participate in the CONNECT Referral Program once accredited with CBA.
Product | Referral Fees |
Loan Protection | $110.00 |
General Insurance (Home, Contents and Car) | $38.50 |
Risk Insurance | Up to 17.5% of the first year’s premium for Personal Risk Products |
Personal Loans | $32.00 |
Business Transaction Account | Up to $100.00 |
Business Online Saver | Up to $100.00 |
Term Deposit | Minimum Term - 3 months $50,000 to $249,999 = $50.00 $250,000 to $999,999 = $100.00 $1,000,000+ = $200.00 |
The broker is only entitled to any benefits in relation to this Program when:
The correct "broker identifying" number is provided.
The person the broker referred to CBA accepts the products (CONNECT Referral Program Table) set out in the above table and those products are established.
A broker will not be entitled to any commission, if the referral for a particular customer, was made first by any other area of the Bank.
Entitlement to Commission on Top Ups
From 24th November 2018, upfront commission for home top up loans drawn down will be calculated based on the new money net debt increase on the 14th calendar day after the top-up amount is drawdown, net of any linked offset account and redraw facility on the 14th calendar day after the top-up is drawn down. This excludes any offset balances held prior to funding of the top-up.
Original Loan was introduced by the broker and the Top Up loan is also introduced by the same broker
A broker introduces a CBA branded loan or line of credit and later the same broker introduces an increase in the amount of credit or credit limit then (a) Upfront Commission will be paid on the Top Up amount (New money) in accordance with current commissions at the time of Top Up. (b) trail commission on the increase will be paid (c) any Upfront and Trail commission paid to the broker must reflect the broker code of the broker who introduced the increase in the amount of credit or credit limit.
Original Loan was introduced by another broker/aggregator or directly by the CBA Bank however the Top Up is now introduced via a Connective broker
CBA have a CBA branded loans or lines of credit with a customer (either originated by a another broker/aggregator or directly by the CBA bank) and later a Connective broker introduces an increase in the amount of credit or credit limit of a loan (a) Upfront will be paid on Top Up amount (New Money) in accordance with current commission at the time of Top Up, aligned to the broker who introduced the Top Up (b) trail commission will apply and (c) the Upfront and Trail commission paid to the broker must reflect the broker code of the broker who introduced the increase in the amount of credit or credit limit.
Original Loan was introduced by a Connective broker however the Top Up was introduced directly by the CBA bank
A Connective broker originally introduces a CBA branded loan or line of credit and the customer later applies for an increase in the amount of credit or credit limit of credit directly with the CBA bank (a) CBA will not pay any Upfront commission for the increase in the amount of credit or credit limit (b) Trail commission will apply (c) any trail commission paid to the Connective broker will reflect their broker code who introduced the original loan or credit limit.
Original Loan was introduced by a Connective broker however the Top Up is now introduced by a broker of another aggregator group.
A Connective broker originally introduces a CBA branded loan or line of credit and later another broker introduces an increase in the amount of credit or credit limit of that loan (a) CBA will not pay any Upfront commission for the increase in the amount of credit or credit limit (b) CBA will not pay any trail commission.
When a Top Up Occurs, if trail is payable, it is payable at the same trail commission rate that applied to that existing CBA banking product immediately before the Top Up.
Entitlement to Commission on Product Switches
Product switches introduced by Connective broker on loans also initially introduced by the same Connective broker
A Connective broker introduces a CBA branded loan or line of credit and later the same Connective broker introduces a Product Switch in relation to that CBA banking product (a) CBA will not pay any Upfront commission for the new CBA banking product unless New Money is also introduced. (b) CBA will cease paying trail commission in relation to the former banking product. (c) Trail commission will apply to the new banking product from the date of product switch. (d) any trail paid to Connective broker will reflect the broker code for the Connective broker who introduced the new banking product.
Product switches introduced by another broker/aggregator on loans initially introduced by a Connective broker
A Connective broker introduces a CBA branded loan or line of credit and later another broker introduces a product switch in relation to that banking product, CBA will cease paying trail commission to the Connective broker in relation to the former banking product.
Product Switches introduced by a Connective broker on loans that were initially introduced by another broker
Where CBA has a loan or line of credit with a customer (either originated by another broker or directly by the CBA bank) and later a Connective broker introduces a product switch in relation to that CBA banking product (a) CBA will not pay any Upfront Commission for the new banking product unless New Money is introduced (b) CBA will cease paying trail commission in relation to the former banking product. Trail commission will apply to the new banking product from the date of the product switch. (c) any trail paid to Connective broker will reflect the broker code for the Connective broker who introduced the new banking product.
Product Switches introduced by CBA on loans initially introduced by Connective broker
A Connective broker introduces a CBA branded loan or line of credit and later the customer applies for a product switch in relation to that banking product directly with the bank (a) CBA will not pay any Upfront Commission for the new banking product unless New Money is introduced. (b) CBA will cease paying trail commission in relation to the former banking product (c) Trail commission will apply to the new banking product from the date of the product switch (d) any trail paid to Connective broker will reflect the broker code for the Connective broker who introduced the new banking product.
When a Product switch occurs, if Trail Commission is payable, it is the payable at the same rate Trail commission rate (and is subject to any remining Trail Qualifying Period) that applied to that existing Banking Product immediately before the Product Switch.
Other General Information and CBA Expectations of a Broker
CBA require broker to complete face to face interviews
All applications must be submitted by brokers, either New loans or Top Ups must be submitted through Third-Party Channel
Brokers must maintain an appropriate level of policy skills and product knowledge and must satisfy any criteria for ongoing accreditation as specified by CBA from time to time.
Where CBA has approved a loan as a result of a loan application or established a product as a result of a referral from you or any other party, that contained fraudulent documentation and/or materially false information, then the broker will refund the commission and/or benefits paid to the broker and that broker will not be entitled to any further commission in respect of that loan and /or product, regardless of whether the broker was aware that any document was fraudulent or any information false.
CBA may suspend, pending completion of their investigations, payment of trailing commissions on (a) all loans introduced by a broker if they reasonably suspect that the broker has acted dishonestly or fraudulently in relation to any matter or in relation to loans CBA identify which contain fraudulent or misleading information.
At the conclusion of their investigations CBA will either immediately terminate the broker or if entitled to do so lift the suspension. If they lift the suspension, CBA is not liable for any losses or claims the broker may have incurred nor are they liable to compensate them for any loss of potential commission earnings.
If at any time the broker is not appointed as a credit representative or licensed CBA may suspend payment of commission.
If there is a complaint against a broker and the broker fails to satisfactorily resolve the complaint, CBA will not pay any commission, including trail commission and bonus payments and the broker will refund any commission paid in respect of, or calculated by reference to, that customer’s loan in the following circumstances (a) claim is made by the customer against CBA, including claims made through court proceedings, CBA internal complaint handling scheme and any approved external dispute resolution scheme (b) claim arises from misconduct of , or breach of these terms/conditions by the broker (c) CBA is required, or agree (acting reasonably) to pay the customer, or to release the customer from liability to the CBA, as a result of such claim.
Broker will not receive commission:
Where the broker submits the application for the Top Up through a channel other than Third Party Channel or the application is approved by an area of the CBA bank other than Third Party Banking Channel.
If any part of the initial sales process or referral services was undertaken or performed by any other areas of the CBA bank.
For Top Ups if the broker was not the cause of the provision of additional money.
Broker agrees to:
Maintain continuous client relationship including client maintenance and service customer retention, addressing general product enquiries on those products offered by us.
Manage the ongoing relationship with any customers to whom the broker sells MAV which includes keeping in regular contact with these customers to ensure the minimum portfolio balance requirements are maintained.
When requested by CBA contact the loan customer whose fixed rate period are about to expire to ascertain customers intentions
Broker must act honestly in their dealings with customers and represent fairly and accurately the terms and conditions of CBA product.