Teachers Mutual Bank has entered the third-party mortgage distribution market, with the announcement yesterday that it has formed partnerships with the aggregators Connective and eChoice Home Loans.Teachers is a bonded financial institution, which means that only teachers and others working in the education sector can be members. The same condition will apply to broker sales.Teachers Mutual Bank's national manager for third-party distribution, Mark Middleton, said he did not expect this to be a problem for brokers.Middleton said: "We are a niche brand, but we service an education sector workforce of 600,000."We know the education community. Large banks don't always get that employment conditions in the sector are different; they take a mass market approach."Teachers will offer the same products and pricing through direct and third-party channels."If we do a campaign, borrowers will get the same deal through a broker or by dealing directly with us," Middleton said.Teachers will pay an upfront commission of 60 basis points and a trailing commission of 20 basis points a year. There are no volume incentives or re-work penalties.It is using the NextGen platform for administration and broker servicing.Middleton said he hoped to be selling 25 to 30 per cent of the bank's home loans through brokers after five years. The bank's mortgage book was worth $3.04 billion at June 30.Recent market reports suggest that brokers are doing more business with smaller lenders. Aggregator AFG reported that the proportion of its lending being funded by "non-majors" has risen from 20.6 per cent in March to 26.3 per cent in September.Middleton said he expected that Teachers' very high customer satisfaction rating would appeal to brokers. And he has put a business development manager liaison team in place to offer brokers a high level of service.