Mortgage broker
An intermediary who compares loans across multiple lenders and manages your application, usually paid by the lender.
Brokers hold accreditation with a panel of lenders and can compare products across them. Because borrowing capacity varies so much between lenders, that comparison alone can be decisive.
They are paid commission by the lender rather than a fee by you, comprising an upfront payment and an ongoing trail. Best interests duty legally requires them to act in your interests rather than pursue the highest commission.
The practical value is in matching your circumstances to the right lender. Self-employed applicants, those with variable income, or buyers with unusual security benefit most.
Ask how many lenders sit on the panel and how many the broker actually uses. A large accreditation list means little if most applications go to the same two or three institutions out of habit.
Why the panel matters
One lender may assess your capacity at $600,000 and another at $750,000 on identical figures, purely because of different expense benchmarks and income treatment.
The bit people get wrong
No broker covers every lender. Some of the sharpest rates come from institutions that do not use brokers at all, so it is worth checking a couple directly as well.
Common questions
Do I pay a mortgage broker?
Usually not. Lenders pay commission. A small number charge fees for complex commercial work, which must be disclosed upfront.
Is a broker better than going direct?
A broker compares more options and handles the paperwork, but a direct application to a lender you have researched can be equally effective if your situation is straightforward.
What is best interests duty?
A legal obligation requiring brokers to act in the borrower's best interests and prioritise them over their own when recommending a loan.