Should you use a mortgage broker or go straight to a bank for your home loan? This is one of the most common questions for Australian home buyers. Here is the honest answer in 2026.
How Mortgage Brokers Work
A mortgage broker acts as an intermediary between you and multiple lenders. They assess your situation, compare loan products from their panel of lenders, and handle the application process on your behalf. In Australia, brokers must hold an Australian Credit Licence (or be a credit representative) and are regulated by ASIC under the National Consumer Credit Protection Act.
How Brokers Are Paid
| Payment Type | Amount | Who Pays |
|---|---|---|
| Upfront commission | 0.60–0.70% of loan amount | The lender |
| Trail commission | ~0.15–0.20% per year of outstanding balance | The lender (ongoing) |
| Fee-for-service | Some charge $1,000–$3,000 direct fee | The borrower |
For most borrowers, a broker is free — the lender pays their commission. The 2020 Best Interests Duty reform means brokers must legally act in your best interest, not just recommend products that pay them higher commissions.
Broker vs Direct — Key Differences
| Mortgage Broker | Direct to Bank | |
|---|---|---|
| Lender choice | ✓ 20–40+ lenders | ✗ One lender only |
| Rate negotiation | ✓ Uses volume to negotiate | Sometimes possible |
| Paperwork | ✓ Broker handles most | ✗ You manage all |
| Speed | Similar | Similar |
| Best for complex situations | ✓ Self-employed, low deposit, complex income | ✗ May decline |
When Should You Go Direct?
Going direct to a bank makes sense if you already have a strong relationship with a lender, want a specific product that isn’t available through brokers, or are refinancing and your existing bank offers a compelling retention deal. Some online lenders (like Unloan, Tic:Toc) also aren’t available through brokers and offer very competitive rates.
The Bottom Line
For most Australians, using a broker is the smarter choice — especially for first home buyers and those with complex situations. You get access to more options, expert guidance, and someone to handle the paperwork. Just make sure your broker explains their panel of lenders and why they’re recommending a specific product.
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Disclaimer: General information only. Not financial advice. Always consult a licensed professional before making financial decisions.