Macquarie Group is ramping up its aggressive push into home lending, joining the rush of banks to increase commissions paid to mortgage brokers.
In a sign of growing competition in the $1.2 trillion mortgage market, Macquarie has raised up-front and trailing commissions for one of the country's biggest brokers, Mortgage Choice.
It is the sixth lender to sweeten incentives for brokers in recent months, a sign rivalry between lenders is heating up.
Amid rapid growth in Macquarie's $10 billion residential mortgage book over the past year, brokers also say the investment bank has been bulking up on staff so that it can handle higher volumes of loan processing.
Under the latest changes, announced to Mortgage Choice brokers this week, Macquarie's up-front commissions were increased from 0.65 per cent to 0.7 per cent, while it raised trailing commissions payable in the third year of the loan from 0.15 per cent to 0.175 per cent. The trailing commissions are at the upper end of those paid by banks, industry sources say.
With a resurgent housing market driving increased demand for home loans, banks are jostling to expand their share, in anticipation of stronger credit growth.
Westpac, St George, CommBank-owned Bankwest, AMP and Rock Building Society have also raised commissions for brokers since July.
Macquarie would not comment, but chief executive Nicholas Moore has previously played down the bank's mortgage expansion by pointing out its market share is less than 1 per cent.
Growing use of mortgage brokers was also confirmed in recent figures from the Mortgage and Finance Association of Australia, which showed the share of new home loans arranged through brokers rose to 46 per cent in September, up from 40 per cent 18 months ago.
The association's chief executive, Phil Naylor, said banks were changing their commissions for competitive reasons, but denied bigger payments could distort the decisions brokers made.
"I think the changes in commissions are really at the margins," he said.
"The broker just wants to make their client happy."
The increased competition comes as regulators urge the sector not to ease credit standards, but brokers insist there has been no relaxation in lending standards.
Mortgage Choice chief executive Michael Russell pointed out several major banks had increased the buffer for testing how borrowers would cope if interest rates rose.
"That's an indication that there's certainly not a relaxation in credit standards," he said.