Aussie Home Loans doesn't want to introduce a flat fee for brokers, despite its parent company believing commissions could mean bad deals for customers.
Former Commonwealth Bank chief executive Ian Narev suggested last year a move toward a flat fee could make brokers "agnostic" toward loan size and leverage.
Those factors currently determine what commission a broker receives and might encourage some brokers to put themselves before their customers.
But Aussie's chief financial officer Giles Boddy told the banking royal commission on Friday a flat fee could put broker services out of reach for some customers.
"Aussie's view is that moving to a flat fee would impact the customer - it would make the affordability of seeing a mortgage broker challenging for some people," he said.
He went on to suggest the trail commission currently paid to brokers wasn't paid by customers, a prospect commissioner Kenneth Hayne scoffed at.
"A lender's not paying for it out of its own pocket and the goodness of its own heart, is it," he said.
"It's going to recover the cost somewhere, isn't it Mr Boddy?"
Mr Boddy also rejected a flat fee on the basis that ongoing commissions provided cashflow for small business brokers.
The commissions have been a point of interest for the banking inquiry which earlier heard almost 600 Aussie Home Loans brokers earned commissions on their own home loans, effectively scoring themselves "a discount".
A Commonwealth Bank audit found 586 cases of Aussie brokers submitting and earning commissions on their own loans during the past four years.
Mr Boddy denied the brokers were pretending to be their own client, but conceded the behaviour was inappropriate.
"They're buying a house, processing their own home loan through a lender and then, because they're a broker, they're getting a trail commission on that, so effectively a discount," Mr Boddy said on Friday.
Aussie has also faced sustained questioning about four brokers caught using fraudulent documents to secure loans and, ultimately, commissions.
Lynda Harris, an Aussie's general manager, was quizzed why Aussie didn't itself pick up the misconduct of two of the brokers, despite it occurring just six months after another fraud was reported from a lender.
In August 2013 broker Shiv Sahay was fired for misconduct. Emma Khalil and Madhvan Nair were both fired in early 2014 for submitting fraudulent documents, picked up by banks.
"I want to put it to you, Ms Harris, that the anomalies with the pay slips, much like the anomalies with the letters of employment for Ms Khalil, were easily detectable ... but they were not detected by Aussie," senior counsel assisting the commission Rowena Orr said.
"No, they weren't," Ms Harris admitted.
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