Customers would be forced to pay mortgage brokers fees for their services, under recommendations for a radical shake-up to the broking industry from the royal commission into financial misconduct.

Commissioner Hayne has called for sweeping changes in the remuneration of brokers – who arrange more than half of all new home loans and are paid by commissions from banks and other lenders.

However, although the government agreed there was a need to “address” conflicted remuneration in broking, it did not commit to implementing all of the commission’s mortgage broking recommendations in full.

Meanwhile, the commission said there was not a case for changing responsible lending laws – one of the most closely-watched issues in financial markets.

Hayne said banks should firstly be banned from paying trail commissions on new loans, with the remaining up-front commissions to be phased out over two to three years.

The “chief value” of trail commissions – which is typically worth about 0.15 per cent of a loan – was that they were “money for nothing,” he said.