A broker sits between you and the lenders, helps identify which lenders are more likely to suit your circumstances and lending criteria, and handles the paperwork. Brokers now account for a large share of new residential lending in Australia.
They don't lend you the money themselves. They help you find and apply for a loan that fits your circumstances, and the lender makes the final lending decision.
Quick links
- Using a mortgage broker (ASIC Moneysmart)
- MFAA: Find a Broker
- FBAA: Find a Broker
- First Home Guarantee (Housing Australia)
- First Home Owner Grant (NSW)
- First Home Owner Grant (VIC)
- First Home Owner Grant (QLD)
- First Home Buyers Assistance Scheme — stamp duty (NSW)
- First Home Buyer Duty Exemption / Concession — stamp duty (VIC)
- First Home Concession — transfer duty (QLD)
- First Home Super Saver Scheme (ATO)
What a mortgage broker actually does
A mortgage broker is a credit professional who must hold an Australian Credit Licence or act as a licensee's credit representative. They compare home loans from a panel of lenders, recommend options that fit, and manage the application through to approval. The size of that panel varies between brokers. A bank generally offers its own products.
That matters because lenders have different appetites. One lender may be comfortable with casual income while another isn't. One may have restrictions around certain property types while another doesn't. A broker knows the quirks and can steer you to a lender that fits.
Does a mortgage broker approve your loan?
No. The broker helps assess your circumstances, recommends suitable lenders and submits your application, but the lender makes the final lending decision.
Is a mortgage broker the same as a bank?
No. A broker is an intermediary between you and the lenders on their panel. A bank lends its own money and generally offers its own home-loan products.
Can a mortgage broker get me a better interest rate?
They may be able to find a loan with a lower rate or different features than the options you have considered, but there is no guarantee that a broker will find the cheapest loan for every borrower. Compare the recommended loan's rate, fees, features and total cost.
Why most home loans go through a broker
In the June 2026 quarter, brokers facilitated 81.6% of all new residential home loans in Australia, a record high. If a lender declines your application, it may not explain all of its reasons. A broker whose application has been declined once can consider other lenders on their panel.
Visual: Broker vs going direct to the bank
| Feature | Mortgage broker | Direct to the bank |
|---|---|---|
| Lenders | A panel of lenders, the size of which varies between brokers | One lender (that bank's products only) |
| Cost to you | Usually no direct fee for a standard residential loan | No broker fee; the bank's usual loan fees apply |
| Regulatory setting | Subject to the Best Interests Duty | A bank employee recommending that bank's products operates in a different regulatory and product context |
| The work | Handles the application and paperwork end-to-end | You generally compare the bank's available products yourself and deal directly with the bank |
| If a lender declines | Can re-shop your file to another lender | You start over with the next bank |
81.6% of all new residential home loans in the June 2026 quarter were facilitated by brokers, a record high. Source: MFAA
How mortgage brokers get paid
It is worth understanding this, because the lender, rather than you, will often pay the broker.
Brokers can receive an upfront commission when the loan settles, and an ongoing trail commission while the loan remains with the lender. The amount varies, so ask the broker to explain exactly how they will be paid for your loan. Some brokers charge fees in particular circumstances, so ask how yours is paid before proceeding.
Brokers are subject to a Best Interests Duty under the National Consumer Credit Protection Act 2009 (see ASIC's guidance, RG 273), and must disclose what they'll be paid before you commit. A broker should be able to explain how they are paid and what that means for their recommendation.
Visual: How your broker gets paid
You
The borrower
Broker
Recommends + lodges
Lender
Funds your loan
| Money flow | Cost / rate | Detail |
|---|---|---|
| You → Broker | Usually no direct fee | For a standard residential loan. Ask whether any fee applies in your case. |
| Lender → Broker | Upfront commission | Paid when the loan settles. The amount varies. |
| Lender → Broker | Trail commission | Paid while the loan remains with the lender. The amount varies. |
Brokers are subject to a Best Interests Duty under the National Consumer Credit Protection Act 2009 (see ASIC's guidance, RG 273). Commissions must be disclosed before you commit.
What happens in the first chat
The first conversation is usually a fact-find, free, by phone or video: what you may be able to borrow, what schemes you might qualify for, and which lenders are worth approaching.
Expect questions on income, employment type, existing debts (credit cards, HECS/HELP, car loans, buy-now-pay-later), savings, expenses, and what you want to buy. The first conversation may only require a rough picture of your income, debts, savings and goals. The broker will tell you what documents are needed for a formal application or pre-approval.
A broker can help estimate your borrowing capacity, but borrowing capacity isn't the same as a sensible property budget. See borrowing capacity vs purchase price.
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 | An indication of what you may be able to borrow, and any schemes worth exploring |
| 4 | 5 min | Next steps | Document list + pre-approval timeline |
Typical example; timings vary.
Usually free, no obligation
Phone, video, or in-person
How to pick a good one
Three things to check before you book:
Accreditation. Membership of an industry association such as the MFAA or FBAA can be another credential to check.
Licensing. Every broker must be a Credit Representative or hold an Australian Credit Licence. You can verify their licensing or credit representative status through ASIC's Professional Registers. If you can't verify it, ask the broker to explain their licensing arrangements before proceeding.
Track record. Look for evidence that they regularly work with borrowers in situations similar to yours, and ask how they are paid and which lenders they can access.
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?
These questions can help you understand whether the broker's recommendation is based on your circumstances and what they have access to.
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 a fee without clearly explaining what it covers or when it applies
- Has a limited lender panel and can't explain why those lenders are appropriate for your situation
- Not on the ASIC register
How a broker can help with first-home-buyer schemes
If you're a first-home buyer, a broker can help identify lenders and loan structures that work with the relevant government schemes.
Eligibility rules, property-price limits and the schemes themselves change, so confirm the current rules before relying on a scheme. The government sources linked at the foot of this page carry the current position.
Ask upfront: "Which schemes do you think I might qualify for, and which of your lenders process them?"
What's next
Next step: pre-approval. Pre-approval is an indication from a lender of how much they may be prepared to lend, subject to the lender's conditions and the property meeting its requirements. It can give you a clearer price range when you're looking at properties, and may be useful when making an offer.
You'll typically need ID, proof of income (such as payslips, or tax returns if you're self-employed) and bank statements. The full list is in the pre-approval document guide on this hub.
When should I speak to a mortgage broker when buying a home?
Ideally before you start seriously looking, so you understand your borrowing position and the costs that sit around the purchase. You can then approach properties with a clearer budget rather than working backwards from the asking price. See getting pre-approved and set a buying budget.
Once you have a property in sight, your finance and conveyancing can move in parallel. Request a free contract review and we'll review the contract while your finance is being finalised.
Sources
- MFAA: Mortgage broker market share reaches record 81.6% (June 2026 quarter)
- ASIC Moneysmart: Using a mortgage broker
- ASIC Regulatory Guide 273: Mortgage brokers, Best interests duty (June 2020)
- Housing Australia: Home Guarantee Scheme
- Housing Australia: Home Guarantee Scheme participating lenders
- Revenue NSW: First Home Owner (New Homes) Grant
- State Revenue Office Victoria: First Home Owner Grant
- Queensland Revenue Office: First home owner grant
- 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
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.
