If you’re borrowing for a home or investment property, you’ve probably wondered whether a mortgage broker is worth involving or if you’d be better off walking straight into a bank. The answer depends on what you value most—convenience, choice, or keeping every part of the process under your own control.
A mortgage broker acts as a go‑between who deals with banks and other lenders to arrange a home loan. Under Australian law, mortgage brokers must act in your best interests when suggesting a loan for you. That means they can’t just push the product that pays them the most; they have to recommend options that genuinely suit your needs and goals.
Arrivau is a licensed Australian mortgage broker. We provide credit assistance, but we are not a lender and never promise loan approval, a particular interest rate or specific savings. The information we share is general – it doesn’t constitute personal financial advice.
What Does a Mortgage Broker Actually Do?
A good broker walks alongside you through the entire loan journey. Typically that includes:
- Understanding your needs, goals and what you can afford to borrow.
- Finding loan options that fit your situation.
- Explaining how each loan works, including the interest rate, features and fees.
- Lodging the application and managing the process through to settlement.
Brokers have access to a panel of lenders, which can include major banks, smaller banks, credit unions and non‑bank lenders. That breadth often saves you from having to research dozens of products on your own.
When you go directly to a bank, you’ll only see that institution’s own loans. The loan officer works for the bank, not for you, and they don’t have a legal best‑interest duty in the same way a broker does.
How Do Mortgage Brokers Get Paid?
Most borrowers don’t pay a broker directly. Lenders typically pay the broker a commission for distributing their products. The commission is usually a percentage of the loan amount and often has both an upfront and an ongoing (trail) component.
Brokers must tell you about the commissions they may receive. So you can ask, “How do you get paid for the advice you’re giving me, and does it differ between lenders?”
Sometimes a broker might charge you a fee directly. If they do, they must clearly explain it and give you a written quote first. You have to sign that quote before the broker can start the service or ask for any payment.
Best‑Interest Duty – What It Means for You
Since 2021, mortgage brokers have been required by law to act in your best interests when recommending a home loan. This duty is enforced by ASIC. It means a broker must prioritise your needs over their own commission, and they must be able to show why the loan they recommend is appropriate for you.
If you’re ever unhappy with the advice you receive, talk to your broker first. If that doesn’t resolve the issue, you can complain to their business in writing. After that, you can take the matter to the Australian Financial Complaints Authority for free, independent dispute resolution.
Questions to Ask a Mortgage Broker
Whether you’re meeting a broker for the first time or comparing offers, these questions will help you check you’re getting value:
- Do you offer loans from a range of different lenders? What sort of lenders do you work with, and which ones can’t you access?
- How do you get paid? Does the commission differ between lenders?
- Why did you recommend this loan to me, and why is it in my best interests?
- What fees will I have to pay when taking out this loan?
- What features come with this loan, and can you show me how they work?
- Can you show me a couple more options, including one with the lowest cost?
Broker vs Bank – A Quick Side‑by‑Side
| Mortgage Broker | Going Direct to a Bank | |
|---|---|---|
| Loan choice | Access to a panel of many lenders | Only that bank’s products |
| Legal duty | Must act in your best interests | No best‑interest duty owed to you |
| Cost | Usually paid by lender commission; fee‑free for you. If a direct fee applies, it must be quoted and agreed upfront. | No broker fee, but you bear the cost of your own research and comparison |
| Paperwork & process | Broker manages application and settlement | You deal with the bank directly |
| Ongoing support | Often reviews your loan later, helps with refinancing | Relationship tied to that bank |
Does a Broker’s Licence Guarantee Quality?
Every broker must hold an Australian credit licence or be authorised as a credit representative. You can verify a broker on ASIC’s Professional Registers. Just be aware that ASIC’s licensing process is a point‑in‑time assessment of the licensee – it doesn’t guarantee the probity or quality of the services provided. So licensing is a minimum safeguard, not a stamp of excellence.
Making Your Decision
Before you see anyone, think about what matters most to you in a home loan. Is it the lowest possible rate, flexible features, or maybe certainty around fees? Make a list of your must‑haves and nice‑to‑haves.
A broker should present you with more than one option, explain the differences, and help you weigh the long‑term costs. You don’t have to take the first loan you’re offered. If nothing feels right, ask for alternatives – even if you have a preference for a particular bank, the broker should still show you how other lenders compare.
Remember, a home loan is a long‑term debt. Even a small difference in interest adds up over time. Having a professional who can lay out the numbers and the fine print can make a real difference to the loan you end up with – and to your peace of mind along the way.
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