In Australia, about 70% of new home loans are now written by mortgage brokers rather than banks directly. There's a reason for that shift. Here's an honest breakdown of both options so you can make the right choice for your situation.
What Does a Mortgage Broker Actually Do?
A mortgage broker is a licensed credit professional who acts as the intermediary between you and a panel of lenders. Rather than selling the products of one institution, a broker has access to dozens of lenders — banks, credit unions, building societies, and specialist non-bank lenders — and can compare their products to find the best fit for your specific situation.
In Australia, brokers hold an Australian Credit Licence (ACL) or operate as an authorised credit representative under an ACL. They are bound by the Best Interests Duty legislation introduced in 2021, which legally requires them to act in your best interest — not the lender's.
How is a broker paid? In most cases, the lender pays the broker an upfront commission (typically 0.55%–0.7% of the loan amount) plus a trailing commission (typically 0.15%–0.25% per year) as long as the loan remains on the broker's books. This means the service is free to the borrower in almost all circumstances.
What Do Banks Offer?
When you apply for a home loan directly with a bank, you're dealing with a bank employee or mortgage specialist who can only offer that institution's own products. They may be excellent at explaining those products, and if you already have a strong relationship with your bank, there can be advantages.
But by definition, a bank lender cannot compare their products against a competitor's. They have no incentive to tell you if another lender has a better rate, a more flexible policy, or a loan structure that's better suited to your income type.
Side-by-Side Comparison
Mortgage Broker
- Access to our wide panel of lenders and hundreds of loan products
- Free service — paid by lender after settlement
- Best Interests Duty: legally obligated to act for you
- Specialist solutions for complex situations (self-employed, credit history, low doc)
- Handles all application paperwork and lender communication
- Ongoing annual reviews to ensure you stay competitive
- Can negotiate rate reductions with existing lenders
Bank Direct
- Only offers that bank's own products
- Also free (no direct fee to borrower)
- Employees incentivised to sell bank's products
- Limited flexibility for non-standard borrowers
- In-branch support may suit some borrowers
- No automatic review — you must ask for rate reductions
- Package discounts for existing customers possible
5 Key Advantages of Using a Mortgage Broker
1. Comparison Power Across Wide Lender Panel
The most obvious advantage: a broker can genuinely compare the market. When Mortgagefy receives a new enquiry, we assess your situation and run it against the policies and pricing of all lenders on our panel. We're not limited to one bank's credit assessment criteria or one institution's risk appetite.
This matters enormously for non-standard borrowers. If you're self-employed, a property investor, recently divorced, or have a previous credit issue, different lenders will treat your application very differently. A bank will simply decline if you don't fit their matrix. A broker will find the lender whose policies suit your situation.
2. Access to Specialist and Non-Bank Lenders
Some of the most competitive rates in Australia come from non-bank lenders like Firstmac, Resimac, and Macquarie Bank — institutions that many borrowers have never heard of. You can't walk into a branch or call a "compare the market" website and access these products — you need to go through an accredited broker.
Similarly, specialist lenders like La Trobe Financial, Pepper Money, Liberty Financial, and Bluestone offer solutions for borrowers with unusual income structures, complex credit histories, or large portfolios that mainstream banks won't touch. These lenders only distribute through brokers.
3. Credit Expertise — Not Just Rate Shopping
An experienced broker doesn't just find a low rate — they understand credit policy at each lender and can guide you to the lender most likely to approve your application at the best possible terms. Every unsuccessful credit application leaves a mark on your credit file. Multiple rejections over a short period can significantly damage your creditworthiness. A broker's job is to get it right the first time.
4. They Handle All the Paperwork
Applying for a home loan involves a significant amount of documentation — income verification, asset and liability statements, bank statements, tax returns, property contracts. A good broker will help you prepare your application package, explain exactly what's needed, and liaise with the lender's assessors on your behalf. You deal with one person, not an anonymous call centre.
5. Ongoing Relationship and Annual Reviews
A mortgage broker's business model depends on client satisfaction and referrals. Once your loan settles, a good broker will review your situation annually to ensure your rate remains competitive, flag when refinancing might save you money, and advise on loan structure as your circumstances change. Banks have no such incentive — it's not in their commercial interest to tell you to switch to a competitor.
When Might Going Direct to Your Bank Make Sense?
In fairness, there are some scenarios where going directly to your bank may be appropriate:
- Existing relationship benefits: Some banks offer genuine "package discounts" to customers who hold multiple products (e.g., transaction accounts, credit cards, offset accounts, insurance). If the combined benefit is substantial, it may outweigh the wider market comparison.
- Very simple situations: If you're a long-term PAYG employee with a large deposit, no debt, and an excellent credit score, your situation is straightforward enough that any lender will want your business. The rate comparison still matters, but the complexity is lower.
- You already bank with a very competitive lender: Some online banks (like ING, Macquarie, and certain credit unions) genuinely offer market-leading rates. If you're already with them and the rate is competitive, refinancing may not be necessary.
The Reality Check
ASIC research has consistently found that broker-originated loans result in lower interest rates and better loan structures on average than direct bank applications, particularly for borrowers with non-standard circumstances. The Best Interests Duty introduced in 2021 has further strengthened protections for borrowers using brokers.
How to Choose a Good Mortgage Broker in Sydney
Not all brokers are equal. Here's what to look for:
- Lender panel size: Ask how many lenders they have on their panel. A panel of fewer than 20 lenders is quite limited. Mortgagefy works with our wide panel of lenders.
- Credit licence: Confirm their ACL number or that they're an authorised credit representative. You can check this on ASIC's professional register.
- Experience with your situation: Ask if they've helped borrowers in your exact situation — self-employed, investor, first home buyer, bad credit. Specialised experience matters.
- Transparency about commissions: A reputable broker will proactively disclose the commission they receive from the lender they recommend and explain why that recommendation is still in your best interest.
- Reviews and testimonials: Check Google Reviews and any industry platforms for evidence of consistent client satisfaction.
About the Mortgagefy team and the Mortgagefy Team
The team at Mortgagefy has helped Sydney home buyers and investors navigate the home loan market — from first home buyers using government grants to self-employed business owners with complex financials to property investors building multi-property portfolios.
Our lender panel covers major banks, credit unions, and specialist lenders for every type of borrower situation. We're available Monday to Saturday, 9am to 7pm, and we offer free face-to-face consultations across Greater Sydney.
Whether you're buying your first home, refinancing an existing loan, or looking at investment property finance, a conversation with Mortgagefy costs you nothing and could save you thousands. Visit our contact page to book a free consultation today.
Frequently Asked Questions
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