Using a broker
How to work with a broker to get a better
home loan deal
With many lenders to choose from, you may decide to get help
from a mortgage broker. Ask the right questions to get a home loan
that meets your needs and is value for money.
What mortgage brokers do
A mortgage broker is a go-between who deals with banks or other
lenders to arrange a home loan for you.
A good broker works with you to:
- Understand your needs and goals.
- Work out what you can afford to borrow.
- Find options to suit your situation.
- Explain how each loan works and what it costs (for example, interest rate, features and fees).
- Apply for a loan and manage the process through to
How mortgage brokers get paid
Often, lenders pay the broker a fee or commission for selling their products, so
you don't pay the broker anything.
Some brokers get paid a standard fee regardless of what loan
they recommend. Other brokers get a higher fee for offering certain
loans. This could influence the loans a broker recommends to
Sometimes, a broker will charge you a fee directly - instead of,
or as well as, the lender's commission.
If you're not sure whether you're getting a good deal, ask
around or look online to see what other brokers charge.
Before you meet with a
If you use a broker, here are some tips to help
Check the broker is licensed
Before meeting with a broker, make sure they have a license to
give you credit (loan) advice.
Search the following three lists on ASIC
Connect's Professional Registers:
- Credit Registered Person
- Credit Representative
- Credit Licensee
To search, choose the list name in the 'Select Register'
If the broker isn't on one of these lists, they are operating
Consider your must-haves and nice-to-haves
Before you see a broker, think about what matters most to you in
a home loan. Do you simply want the lowest cost loan? Do you want
specific features, such as being able to make extra repayments?
Thinking about this beforehand will make the conversation with
your broker easier. Make a list of your:
- 'must-haves' (can't do without)
- 'nice-to-haves' (could do without)
See choosing a home loan for advice on
what to consider.
Meeting with a mortgage
Bring your list of must-haves and nice-to-haves.
Ask questions. Lots of them. Get the broker to explain how each
loan option works, what it costs and why it's recommended to you.
If you are not happy with any option, ask the broker to find an
You don't have to take the first loan you're offered. You may
have a preference for a particular lender, such as your current
bank. Ask to see loans from other lenders as well, so you can
A home loan is a long-term debt, so even a small difference in
interest adds up over time. If you can get a lower interest rate
from another lender, you could save thousands of dollars.
Questions to ask your mortgage broker
- Do you offer loans from a range of different lenders?
- How do you get paid for the advice you're giving me? Does this
differ between lenders?
- Why did you recommend this loan to me?
- What fees will I have to pay when taking out this loan?
- What features (options) come with this loan? Can you show me
how they work?
- Can you show me a couple more options, including one with the
- What is the threshold for lender's mortgage insurance (LMI) and how
can I avoid it?
- What information do I need to provide for the loan
Get a written agreement from the broker
A written agreement tells you the:
- type of loan
- loan amount
- loan term (duration)
- current interest rate
- fees you have to pay (for example, broker's fee, loan
application fee, ongoing fees)
Make sure you're comfortable with what you're agreeing to. Ask
more questions if there's anything you're not sure about.
Never sign blank forms or leave details for the broker to fill
in later. If you feel you're being pressured into signing, ask for
more time to think about the loan. Or go to another broker.
Problems with a mortgage
If you're unhappy with the loan advice you've received or fees
you've paid, there are steps you can take.
Talk to your broker
The first step is to talk to your broker. Explain the problem
and how you'd like it fixed.
Make a complaint
If the problem isn't fixed, make a complaint to your broker's
business in writing. See how to complain for help with this.
If the problem is still not resolved, contact the Australian
Financial Complaints Authority to make a complaint and get
free, independent dispute resolution.
A mortgage broker can save you time and money,
but you should still do your own research. Be prepared to ask
plenty of questions to help your broker find you a loan that meets
your needs and offers value for money.
Last updated: 28 Aug 2019