Commonwealth Bank CEO Matt Comyn is prepared to charge home buyers a fee for taking out a loan as mortgage brokers move to a borrower-pays system.
Mr Comyn supports replacing the commissions lenders pay to mortgage brokers with a fee paid by the borrower, advocating the move even before the banking royal commission recommended it.
The head of Australia's largest bank said a borrower-pays system would deliver better outcomes for customers.
"I think there will be clear benefits to customers over the medium to long term," he said.
Mr Comyn agrees with the royal commission that it may be necessary to require banks to charge a fee to their direct home loan customers, to maintain competition and create a level playing field with brokers.
He proposed CBA pay a flat fee to brokers while heading its retail bank two years ago, but abandoned the plan after realising the rest of the market would not follow suit.
Mr Comyn told the royal commission the most attractive model was where consumers paid the flat fee.
Mr Comyn on Wednesday said his view had not changed, but it was important the broker channel continued to thrive as it provided an important service.
"I think it's really important that the broking industry is certainly not disadvantaged."
The move is expected to increase the market position and pricing power of the big four banks, given their large branch networks.
Mr Comyn noted there was no reduction in the capacity or number of mortgage brokers when the Netherlands introduced the changes.
Reserve Bank governor Philip Lowe agreed in-principle with a ban on trailing or ongoing commissions and the payments being upfront, but said the government was right to be cautious about the competition issues involved with making the borrower pay.
