What a mortgage broker actually does (and when to use one)

If you have only ever dealt with your own bank, the broker model can seem mysterious. It is actually simple: a broker works across a panel of lenders instead of for one of them, and their job is to match your situation to a loan, then run the application for you.

What the work looks like

A broker starts with your circumstances: income, deposit, existing debts, and what you are trying to do. From there they compare loan options across their lender panel, explain the trade-offs in plain language, and recommend a path. Once you choose, they prepare and lodge the application, deal with the lender’s questions, and keep the process moving through approval and settlement.

How brokers are paid

For most home loans the broker receives a commission from the lender that ends up funding the loan, rather than charging you a fee. Australian brokers are required to disclose how they are paid before you commit. Ask for that disclosure and read it. If a fee ever does apply to your situation, you should hear about it up front, not at settlement.

When a broker makes the most sense

Talking to a broker is most valuable when your situation has any wrinkle at all: a modest deposit, self-employment income, an existing property in the mix, or simply no time to compare lenders yourself. And if your current loan has been untouched for years, a review costs nothing and answers a question worth asking: is this still the right loan for us?

This article is general information only. It does not consider your objectives, financial situation or needs. Speak to a qualified professional about your individual circumstances.