Important Changes - Empower Range of Loans
We are pleased to be able to announce some upcoming changes to the way upfront commissions are paid on the Empower range of loans.
The feedback has been clear, and as a result, part of these changes includes the removal of partial repayment clawbacks. In the coming months there will be a move towards paying upfront commissions on the loan account balance (net of any offset account balances) rather than the full loan limit.
Effective 1 December 2018, an interim solution will be implemented where we are paid commission on the loan account balance (net of any offset account balances), which will be calculated as at the last calendar day of the month the loan settles.
As part of these changes, partial repayment clawbacks (ie where the loan is not fully utilised within the first six months after settlement) will be removed from this date. Partial repayment clawbacks will still apply to loans settled prior to 1 December 2018.
There will also be an additional commission payment implemented. After 12 months, each loan account balance will be examined and an additional commission payment will be made on the difference between the current loan account balance (net of any offset account balances) and the loan account balance used in the upfront calculation (net of any offset accounts), as long as the amount is greater than or equal to $50,000.
What's being worked towards:
In the longer term upfront commissions on the loan account balance (net of any offset account balances) will be calculated at the 10th calendar day after settlement. We will provide plenty of notice when these changes are ready to come into effect.
What's not changing?
- The way trail commissions are calculated is not changing.
- For principal increases, we will continue to be paid after settlement based on the full amount of the increase.
- Commissions on construction loans will continue to be paid on the full loan limit.
- Commission clawbacks will still apply if loans are fully repaid and discharged early.
Should you wish to look at how this will work in practice, please click here for some examples.