This Commissions Guide article relates to St George, Bank of Melbourne, and Bank SA Residential loans. Articles related to other St George, Bank of Melbourne, and Bank SA 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
| ex GST | inc GST |
Upfront | 0.65% | 0.715% |
Trail | 0.15% | 0.165% |
Upfront Commission
SGB will pay the broker an upfront commission for each approved application for approved finance, by way of an initial upfront commission (less any amounts in any offset account which is linked to the loan) on the third business day following settlement, for new standard home loans along with Subsequent up-front commission (see below).
No upfront commission is payable where the amount (less any amounts in any offset account which is linked to a loan), or the drawn top-up amount or increase of the approved application is less than $50,000. Further principles governing payment of upfront commission and trailing commission in respect of applications involving refinances or top-ups of existing SGB loans are set out in introducer kit.
Upfront shall be calculated, if the loan is not intended to be drawn in one amount (for example a continuing credit contract or a progressive drawdown loan) on the credit limit for that loan, provided that if the loan has not been fully drawn within 12 months of the date of payment the Initial upfront commission for that loan, SGB may require the broker to repay the amount of the initial upfront commission.
Split Loans (sequence loan) which are settled within same month, upfront will be paid calculated on the end of month balance net of offset balance (i.e., end of month balance less end of month offset balance).
Construction Loans – These loans must be entered as a building loan, renovation loan or progress draw loans in system using CNSTR purpose code for Construction or RENIM purpose code for Renovations or Improvements. For these loans upfront will be calculated on the loan limit.
SGB Line of Credit (Portfolio Loan), Upfront will be calculated using net of offset calculation.
Subsequent Upfront Commission
The subsequent commission will be calculated after the first anniversary of the settlement of a standard home loan, calculated using current upfront commission percentage of the largest eligible balance at any time in the 12-month period since settlement, less the initial upfront commission previously paid for that loan. If the calculation of Subsequent upfront for a loan is less than $0.00 no subsequent upfront commission is payable for that loan.
Subsequent upfront commission is only payable on new standard home loans (and not equity access loans, loans under continuing credit contracts, progressive drawdown loans, other loans or top-ups or increases to existing standard home loans).
The Subsequent upfront commission will be payable in the second month following the anniversary of settlement.
Top-up Commission
SGB pays upfront commission (for Standard Residential and Construction Loans) on any loan amount increase on an existing loan (top up) where the increase is $50,000 or more and will further pay trailing commission on the increased loan amount. No upfront commission will be paid if the top up loan is less than $50,000, however, trailing commission will be paid on the increased loan.
Where the top up on an existing loan is originated by a broker other than the broker that originated the existing loan, the trailing commission on the increased loan amount (existing loan balance plus top up amount) will be paid to the broker that originated the top up once the top up had been drawn. Trailing commission to the broker that originated the existing loan will cease.
If a change of loan facility can be accommodated via the portability process, there will be no change to commission rate paid on the loan. If portability is unable to be utilised and the loan is required to be re originated, then the trail will be reduced.
Refinance of an existing loan less than 2 years old, clawback may apply (100% up to 12 months and 50% from 12 months to 2 years). However Upfront will be paid on new loan based on end of month balance net of offset balance.
Additional notes
If (i) an applicant draws a loan for the acquisition of land and (ii) the broker is paid an upfront commission with respect to that loan, and (iii) the applicant subsequently takes out a loan for construction on the land, and uses part of the proceeds of that loan to pay out the land loan, then for the amount of the subsequent loan referred to at (iii) above for the purposes of calculating upfront commission payable to the broker will be reduced by an amount equal to the amount of the loan referred to in (i).
If (i) the broker is paid an upfront commission with respect to an approved application for residential finance and (ii) subsequently an application for residential finance is approved and is used all or part to payout an existing loan referred to in (i) then the amount of the subsequent loan referred in (ii) for the purpose of calculating upfront will be reduced by an amount of the loan referred to in (ii).
A product switch is where the applicant keeps the same loan number or switches to a combination loan, at least one loan of which retains the same loan number.
Subsequent upfront commission is only payable on new Standard Home Loans (and not Construction, Portfolio or other loans or increases to existing Standard Home Loans).
Standard Home Loans include, Investment Basic Variable, Investment Fixed 1 to 5 years, Investment Standard Variable, Owner Occupied Variable, Owner Occupied Fixed 1 to 5 years, Owner Occupied Standard Variable and any other type of finance SGB/BOM/Bank SA notify us from time to time.
For Relocation loans, the upfront commission will be based on the end loan balance.
St George Group will not pay upfront commission on some margin-based products
No upfront is payable for monies already borrowed by the borrower. Including renewal of any expired loan facility
The broker will not receive any upfront commission on an increase to an existing loan unless the broker interviews the borrower and refers the request to increase the loan to St George
The limit on any sub account allocated for Asset Access will be excluded from the calculation of upfront payments
Commission will only be paid on loans lodged electronically via bank’s proprietary software system. Loans lodged outside systems will be accepted but no commission will be eligible to be paid.
Trail Commission
Trail commission is based on the loan balance at the end of the month and is paid monthly but is not paid on balances in the month of settlement and month of discharge. The loan must have a balance outstanding at the beginning and end of a month.
Trail commission will continue for loans (both on the existing loan and the increase in the loan) where an increase has occurred provided that the loan application is referred to St George and in the event the borrower (s) use one of St George’s delivery channels for the application to increase the loan that the loan increase is more than $100,000.
Trail payments for Foreign Currency loans will be based on the loan balance converted to Australian Dollars at the end of the month using the spot rate determined by St George and paid monthly.
Trail commission is calculated on the loan balance (less any amount in a linked offset account) on the last day of the month,
Where a loan has been in arrears for thirty (30) days or more or more Trail commission will not be paid. Trail commission will recommence 30 days after the repayment of all arrears.
For relocation loans if it has an end debt trail will begin when the end debt is finalised and will be paid in the second month after the end debt is finalised. Trail is not paid on relocation loans that do not have an end debt.
Clawbacks
Period | % Clawback |
0-12 Months | 100% |
13-24 Months | 50% |
For loans for construction purposes only, if at the date of termination or discharge of that loan less than 95% of the credit limit has been drawn, except where a relevant clawback amount is payable, the broker must repay an amount equal to the difference between the initial upfront commission paid by SGB for that loan and the initial up front commission that would have been payable by SGB for that loan had the credit limit for that loan at settlement been equal to the highest amount drawn under the loan as at the last business day of the commission period to the date of termination.
If SGB has paid the broker an upfront commission, and a loan which settles (other than a switch to another SGB product or otherwise than in the course of what SGB determines in its absolute discretion to be a bona fide repayment or refinancing by customer within any clawback period including any Subsequent payment of commission then broker must repay the amount specified.
In the event of a loan book transfer, the early repayment clawback (as outlined above) will be applied to the New Broker, instead of the original broker.
Clawback may apply to refinances of existing loan within 2 years. However Upfront will be paid on the new loan.
Referral Commission
The following commissions are payable where a broker refers residential loans to the St George Group
Upfront
For Relocation loans, the upfront commission will be based on the end loan balance only unless there is no end balance when it will be $500.
St George Group will not pay upfront commission on some margin-based products
The limit of any sub accounts allocated for Asset Access will be excluded from the calculation of Upfront payments
Portfolio loans are paid at 75% of standard loan rates
Trail
Trail is not paid in year 1. Trail of 0.11% p.a. applies from Year 2 onwards
Trail commission is based on the loan balance at the end of the month and is paid monthly but is not paid on balances in month of discharge.
Trail commission will continue for loans (both on the existing loan and the increase in the loan) where an increase has occurred provided that the loan application is referred to St George and in the event the borrower (s) use one of St George’s delivery channels for the application to increase the loan that the loan increase is more than $100,000
Trail commission is calculated net of offset balances
Clawbacks
If the loan is discharged within twelve (12) months of the settlement date of the event that entitled the broker to payment of that upfront commission, the broker must refund 100% of the upfront they paid plus any GST adjustment which the broker is entitled to receive in relation to that refund
If the loan is discharged after twelve (12) months and within twenty-four (24) months of the settlement date of the event that entitled the broker to payment of that upfront commission, the broker must refund 50% of the upfront commission they paid plus any adjustment which the broker is entitled to receive in relation to that refund