Latest figures from the Mortgage and Finance Association of Australia show that brokers write almost 75 per cent of all new home loans – up from about 60 per cent five years ago, and less than 50 per cent in 2012.

Such rapid growth has naturally ruffled feathers in banking. Not only do banks face the cost of paying brokers more commissions for selling the loans, but the rise of brokers has also helped to encourage customers to shop around and refinance – a positive trend for customers.

This has helped to turn home loans into “commodities” – most customers don’t care which bank provides their loan, as long as the mortgage is approved in time and at a competitive interest rate. It also helps that broking appears “free” to the customer – though it’s paid for by a commission from the bank.

For banks, however, the rise of mortgage brokers has eaten into profits and driven down returns from home loans. Banks are trying to fight back, and the recent moves on bonuses should be seen in that context.

CBA’s chief executive Matt Comyn told a recent parliamentary inquiry that the bank’s move to raise maximum bonuses for some home lending staff was an attempt by the bank to keep high-performing bankers, who can make more money as mortgage brokers (where there’s no limit on the commissions you can make – though there are legal duties to act in the customers’ best interests).

“We felt that we were putting ourselves at a significant competitive disadvantage,” Comyn said.

The broking industry peak body reacted furiously to Comyn’s comments, stressing that brokers are held to higher regulatory standards than bank staff.

NAB chief executive Andrew Irvine told the same committee its move to raise bonuses was made reluctantly, but he indicated that NAB felt it had to match CBA to hang onto top staff.

“Unfortunately, following the announcement by one of our competitors, I think it made our situation untenable,” he said.

Westpac is considering whether to follow its rivals, and it would make sense if ANZ was also watching closely.

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These changes from NAB and CBA have been branded “disappointing” by the Australian Securities and Investments Commission, and consumer group Choice is also concerned. The worry is that if banks start offering bigger bonuses to staff who sell the most mortgages, it will encourage mis-selling. Time will tell if those risks eventuate, and ASIC has said it will monitor the situation closely.

For bank investors, meanwhile, the changes to bonuses are part of a wider battle between brokers and banks over who pockets the profits from the $2.2 trillion mortgage market.

CBA has also launched a no-frills digital loan in recent years that has a lower interest rate but cannot be sold through mortgage brokers. NAB’s Irvine has also made it clear that home loans sold via brokers were less profitable for the bank.

At the other end of the spectrum, Macquarie has relied on mortgage brokers to become the great disruptor of the home loan market of the past decade. It’s amassed a share of 5.5 per cent in home loans (a big move in this business) and in July, its home loan portfolio grew more than five times faster than the market. ANZ has also been making greater use of brokers recently as it’s tried to expand its share.

Veteran banking analyst Brian Johnson, of MST Marquee, said the use of brokers was one of the most important issues in retail banking because loans written through brokers were less profitable for banks. “You’ve got this massive bifurcation between strategies,” Johnson said. “It’s the most significant thing in the market.”

With brokers now writing almost three in four new loans, they are clearly here to stay. That is one reason why the mortgage market is a less profitable hunting ground for banks than it once was. It’s also why the banks are attempting to reassert themselves, even if it means breaking some previous commitments.

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