Last updated: July 2026 · Reviewed by John Pierre Saliba, Director and Mortgage Broker, MFAA Accredited
The Core Difference
A mortgage broker compares home loans from 50+ lenders to find the one that best suits your situation. A bank can only offer its own products, regardless of whether they're the best fit. In Australia, approximately 70% of all new home loans are now arranged through mortgage brokers. That number has grown every year for a decade.
Rate Comparison: Broker vs Bank
Banks offer advertised rates, and offer slightly better rates to new customers. Brokers access the full panel of rates across 50+ lenders, including rates not publicly advertised. On a $700,000 loan, the difference is commonly 0.3–0.7%, worth $2,100–$4,900/year. Banks compete for new business. A broker puts multiple banks in competition for your loan simultaneously.
What a Broker Does That a Bank Can't
- Compares 50+ lenders including specialist non-bank lenders
- Matches your profile to the right lender, self-employed, unusual income, credit history
- Manages the full process, pre-approval to settlement
- Best Interests Duty, legally required to recommend what's best for you
- Ongoing support, rate reviews, refinancing, investment structuring
The Cost Question
The broker is paid by the lender, not by you. Upfront commission (0.55–0.65% of loan) and trailing commission (0.15–0.25% annually) are disclosed in the Credit Proposal Disclosure. Commissions are standardised across lenders, brokers can't be incentivised to recommend higher-rate products. Combined with Best Interests Duty, your interests are protected.
When Going Direct Makes Sense
- Significant existing banking relationship with one institution, negotiated preferential rates
- Entirely standard situation with time to manage the process yourself
- You've independently verified the bank's offer is genuinely the best available
For most borrowers, particularly complex situations, self-employment, investment, credit history, a broker delivers a better outcome.
