The head of the country's biggest retail mortgage broker, Aussie Home Loans chief James Symond, warns a "crazy" plan to scrap commissions will force a wave of brokers out of the industry, limit access to credit, and boost the dominance of the big banks.

Aussie, which is owned by the Commonwealth Bank, but has a starkly different view to its parent company, has joined the chorus of brokers claiming the royal commission's recommendations threaten to harm competition in home lending.

The royal commission's recommendation for a shake-up to mortgage broker pay has divided the finance sector. Credit:Rob Homer

In a finding that has shaken the broking industry, royal commissioner Kenneth Hayne last week slammed trail commissions paid to brokers by banks, which are about 0.15 per cent of a loan's value, paid over the life of a loan, as "money for nothing." He said they should be banned on new loans, which the government has agreed to do from mid next year.

He also said up-front commissions, payments of about 0.5 per cent of a loan's value that a bank gives a broker when a loan is commenced, should also be eliminated because this was a form of "conflicted" remuneration, and replaced with a fee paid by consumers.