Accountants, lawyers paid to ‘introduce’ CBA’s Unloan mortgage to borrowers

The Unloan division of the Commonwealth Bank is paying a commission to professionals, such as accountants, lawyers and financial planners, among others, for introducing its variable rate mortgage to clients.

Under the “introducer” agreement, the introducer is paid 0.33 per cent of the value of the mortgage upfront if the client goes on to complete settlement.

Mortgage and Finance Association of Australia’s Anja Pannek says anyone introduced to a mortgage needs to have their eyes wide open.Credit: AFR

Some introducer agreements were criticised by the banking Royal Commission as the introducers were giving credit advice, despite not being licensed to do so. ANZ and NAB have paid fines for contravening the laws with their introducer agreements.

Mortgage brokers are licensed to give credit advice and are subject to a “best-interests duty”, where consumers’ interests must be prioritised over their own.

They will recommend a mortgage from among its panel of lenders that considers the personal circumstances of the person seeking the mortgage. Applications can be made directly on the Unloan website. While Unloan has been around since May 2022, its introducer agreement is new.

Daniel Oertli, the chief executive of Unloan, says it has studied the previous issues relating to introducer programs and has designed its program with those in mind.

Unloan’s introducers do not give advice, but forward a digital link to Unloan’s website with the commission disclosed to the customer.

“All referral partners are vetted; all referrals are made via an anonymous link to Unloan, so that partners are not involved in the collection of any information,” Oertli says.

Anja Pannek, the chief executive of the Mortgage and Finance Association of Australia (MFAA), says the association is worried about this and other styles of referral programs, where the client is directed to one lender by someone who is not required to act in the best interests of clients.

Anyone who is introduced to a mortgage needs to have their eyes wide open, Pannek says.

“It’s only when you go to see a broker that they take the time to really understand your needs, assess your personal requirements and have a regulatory obligation to act in your best interests,” Pannek says.

Peter White, the managing director of the Finance Brokers Association of Australasia (FBAA), says whenever you are introduced to a mortgage or go to a lender, you need to do your research to see if it is as good as it sounds.

Unloan’s variable rate mortgage has an interest rate of 5.99 per cent for owner-occupiers paying principal and interest. The interest rate is 6.29 per cent for investors. Fixed interest rate mortgages are not available.

The prevailing interest rate reduces 0.01 percentage point every 12 months. It is available to those with at least 20 cent equity in their property or who can put at least 20 per cent down on an investment property.

“Unloan is what we’d classify as a ‘no frills’ home loan,” says Sally Tindall, head of research at RateCity.

The 5.99 per cent interest rate for the variable interest rate for owner-occupiers puts it in the top four per cent of lowest rates among owner-occupier principal and interest variable rate mortgages listed on RateCity’s database, excluding green loans and introductory rates.

It does not have an offset account, but offers a redraw facility that lets the borrower access any extra repayments that have been made on the home loan in excess to the minimum scheduled repayments, Tindall says.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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