A broker sits between you and the lenders, works out which ones will say yes, and handles the paperwork. Most Australians buying a home now go this way.
What a mortgage broker actually does
A mortgage broker is a licensed credit professional who compares home loans across a panel of 20 to 40 lenders, recommends one that fits, and runs the application through to approval. A bank can only sell you its own products.
That matters because lenders have different appetites. One rejects casual income, another accepts it. One won't touch apartments under 50 square metres, another doesn't care. A broker knows the quirks and steers you to a lender that fits.
Why most Aussies use one
In the December 2025 quarter, brokers wrote 76.7% of all new residential home loans in Australia. A record high since the MFAA started tracking in 2013. About 45% of brokers' owner-occupier customers are first home buyers, vs ~30% market-wide. If a bank declines you, you'll rarely know why. A broker who's been declined once has another 30 lenders to try.
Visual: Broker vs going direct to the bank
| Feature | Mortgage broker | Direct to the bank |
|---|---|---|
| Lenders | A panel of 20–40 lenders | One lender (that bank's products only) |
| Cost to you | $0 for standard residential loans | $0 (built into the loan) |
| Legal duty | Bound by Best Interests Duty (since January 2021) | No best-interests duty — bank staff sell their own loans |
| The work | Handles the application and paperwork end-to-end | You do the legwork, application and comparison |
| If a lender declines | Can re-shop your file to another lender | You start over with the next bank |
76.7% of all new residential home loans in the December 2025 quarter were written by brokers. A record high. Source: MFAA
How brokers get paid (the honest version)
For a standard residential loan, you don't pay the broker. The lender does:
- Upfront commission. ~0.65–0.70% of the loan amount plus GST, paid on settlement. On a $600,000 loan, ~$3,900–$4,200.
- Trail commission. ~0.15–0.20% of the remaining balance, paid monthly while you stay with that lender.
Since 1 January 2021, brokers have been bound by a Best Interests Duty (ASIC RG 273). They must legally prioritise your interests and disclose what they'll be paid before you commit. If they dodge the question, find another broker.
Visual: How your broker gets paid
You
The borrower
Broker
Recommends + lodges
Lender
Funds your loan
| Money flow | Cost / rate | Detail |
|---|---|---|
| You → Broker | $0 direct cost | Standard residential loans |
| Lender → Broker | 0.65–0.70% + GST | Upfront, on loan amount |
| Lender → Broker | 0.15–0.20% p.a. | Trail, on remaining balance |
Bound by Best Interests Duty since 1 Jan 2021 (ASIC RG 273). Commissions must be disclosed before you commit.
What happens in the first chat
Usually 20–45 minutes, free, by phone or video. It's a fact-find: what you can borrow, what schemes you qualify for, and which lenders are worth approaching.
Expect questions on income, employment type, existing debts (credit cards, HECS, car loans, BNPL), savings, expenses, and what you want to buy. You don't need documents yet. A rough idea of gross income, debts, and savings is enough. The full document list (payslips, tax returns, bank statements, ID) comes at pre-approval.
Visual: What happens in your first broker call
| Step | Time | Stage | What happens |
|---|---|---|---|
| 1 | 5 min | Intro | Broker explains their lender panel + how they get paid |
| 2 | 15 min | Fact-find | Income, debts, savings, deposit, goals |
| 3 | 5 min | Borrowing estimate | Rough number + scheme eligibility (FHOG, FHG, FHSS) |
| 4 | 5 min | Next steps | Document list + pre-approval timeline |
~30 minutes total
Free, no obligation
Phone, video, or in-person
How to pick a good one
Three things to check before you book:
Accreditation. Membership of the MFAA or FBAA — both set conduct standards above the legal minimum.
Licensing. Every broker must be a Credit Representative or hold an Australian Credit Licence. Verify on ASIC's Professional Registers. If they don't show up, walk away.
Reviews. Google reviews and word of mouth beat slick marketing. Ask how many first home buyer settlements they did last year.
On the call, ask:
- How many lenders are on your panel, and which ones?
- Why this specific lender for my situation?
- What's the lowest-rate option you could put me into, and why aren't you recommending it?
- How much will you be paid on this loan?
A good broker answers all four without flinching.
Red flags
- Pushes one lender every time and can't explain why
- Won't tell you their commission, or gets vague about it
- Suggests fudging your expenses to get a bigger loan
- Charges an upfront fee for a standard residential loan without explaining what it covers
- Can't access major lenders, or the "panel" is suspiciously small
- Not on the ASIC register
Specifically for first home buyers
A broker who works regularly with FHBs should know the schemes inside out. As of 2026, that's three federal schemes that apply Australia-wide, plus a state grant whose dollar value and rules change depending on where you're buying.
Federal schemes (Australia-wide)
- First Home Guarantee (also marketed as the 5% Deposit Scheme). From 1 October 2025, eligible FHBs can buy with a 5% deposit and avoid LMI. Place limits and income caps were removed. Property price caps vary by state:
- NSW: $1,500,000 in Sydney plus the regional centres of Newcastle, Lake Macquarie and Illawarra; lower elsewhere
- VIC: $950,000 in Melbourne and Geelong; $650,000 in the rest of Victoria
- QLD: $1,000,000 in Brisbane, Gold Coast and Sunshine Coast; $700,000 elsewhere
- First Home Super Saver Scheme. Withdraw up to $15,000 of voluntary super contributions per financial year, capped at $50,000 total, toward your deposit.
- Help to Buy. Federal shared-equity scheme that launched 5 December 2025. The government takes up to a 40% stake in a new home (30% in an existing one) in exchange for a smaller deposit and no LMI. You can't combine Help to Buy with the First Home Guarantee, so a broker who knows both can model which option leaves you better off.
State grant (you'll qualify for one, based on where you buy)
- NSW First Home Owner Grant. $10,000 for new homes only. Cap of $600,000 for a purchased new home, or $750,000 combined for a house-and-land package.
- VIC First Home Owner Grant. $10,000 for new homes only (never previously sold, occupied, leased, or used for short-term accommodation). Cap of $750,000.
- QLD First Home Owner Grant. $30,000 for new homes (contracts signed between 20 November 2023 and 30 June 2026) where the total home and land value is under $750,000.
Stamp duty concessions (separate from the grant)
Most FHBs also qualify for a stamp/transfer duty concession or exemption. Rules differ by state. Your conveyancer applies for it at settlement; a good broker knows which lenders process it cleanly alongside the loan.
| State | Scheme | Duty exemption / concession |
|---|---|---|
| NSW | First Home Buyers Assistance Scheme | full exemption up to $800,000; concessional rate $800,000–$1,000,000 (new or existing homes) |
| VIC | First Home Buyer duty exemption or concession | full exemption up to $600,000; sliding-scale concession $600,001–$750,000 |
| QLD | First Home Concession | no transfer duty on homes up to $700,000; concession up to $800,000 (contracts signed on or after 9 June 2024) |
Ask upfront: "Which schemes do you think I qualify for, and which of your lenders process them?" If they pause or guess, they don't work with enough FHBs.
What's next
Next step: pre-approval — a conditional sign-off telling you exactly what you can borrow. It's what gets you taken seriously when making offers. You'll need payslips, tax returns, bank statements, and ID; the full list is in the pre-approval document guide on this hub.
If you've got a property in your sights, request a conveyancing quote and we'll get your contract review moving in parallel.
Sources
- MFAA: Mortgage broker market share reaches new peak (March 2025 quarter, 76.8%)
- The Adviser: Mortgage broker share hits record December high (76.7%, Dec 2025 quarter)
- ASIC Moneysmart: Using a mortgage broker
- ASIC Regulatory Guide 273: Mortgage brokers, Best interests duty (June 2020)
- Housing Australia: Unlimited places, higher property price caps from 1 October 2025
- Housing Australia: Home Guarantee Scheme participating lenders
- Revenue NSW: First Home Owner (New Homes) Grant ($10,000)
- State Revenue Office Victoria: First Home Owner Grant ($10,000)
- Queensland Revenue Office: First home owner grant ($30,000)
- Revenue NSW: First Home Buyers Assistance Scheme (stamp duty exemption / concession)
- State Revenue Office Victoria: First home buyer duty exemption or concession
- Queensland Revenue Office: First home concession (transfer duty)
- Australian Taxation Office: First home super saver scheme
- ASIC: Professional Registers (verify a broker's credit licence)
- FBAA: Finance Brokers Association of Australia
- MFAA: Mortgage & Finance Association of Australia
- https://www.mfaa.com.au/find-a-broker
- https://www.fbaa.com.au/find-a-broker/
- https://www.housingaustralia.gov.au/home-guarantee-scheme
General information only — not financial or legal advice. Lending criteria and conveyancing rules vary; confirm your situation with your broker, lender or a licensed conveyancer.