Irish mortgage brokers are expected to begin charging for their services as home loan lenders slash commissions or opt to cease using the intermediaries. Business transacted by brokers will inevitable fall and a contraction of the sector will follow.

The Professional Insurance Brokers Association said on Thursday that it is inevitable that an extra burden on prospective new home-owners, who do not deal directly with lenders, would be introduced.

Last year, mortgage lender EBS said that it has traditionally operated exclusively through its network of branches and franchised agents. But it said that the market for home loans in Ireland had been transformed "by a new breed of independent mortgage brokers who now account for 40 percent of the market. To respond to this marketplace change, EBS needed a channel to reach these brokers."

Big bank brands in the market will be in a strong position with the contraction of the broker market.

Today's announcement from the Professional Insurance Brokers Association (PIBA), follows the decision by several Irish banks and other lenders to cut back the commission they pay.

PIBA says it has had to re-evaluate how it does business.

Members will discuss how to introduce a fee at a conference in Dublin today. This is because lenders are paying them less in commission and reducing the number of products they are offering brokers for sale.

Jack Fitzpatrick, chairman of the Professional Insurance Brokers Association, said his 900 members are suffering the knock-on effects of volatility in the global markets that is affecting banks. He warned this will have repercussions for customers using brokers to get mortgages.

In the last two weeks seven banks have retuned their mortgage offering - either by putting rates up, putting loan to value ratios up, pulling out of the broker channel, or cutting broker commission.

On Wednesday, AIB and EBS were the latest to make moves. AIB said it is cutting the commission it pays to brokers to 0.5% of the mortgage amount drawn from 1%. The bank said this is due to the continuing high cost of funds in the financial markets and the effect this is having on margins in its mortgage business.