A good mortgage broker can save you thousands of dollars and hours of stress. But how do you find the right one? This guide covers what to look for, questions to ask, and red flags to avoid.
Why Use a Mortgage Broker?
Before we dive into choosing a broker, let's understand why you might use one:
- Access to more lenders: Brokers compare loans from 20-40+ lenders, not just one bank
- Save time: They do the research and paperwork for you
- Expert guidance: They understand complex policies and can navigate tricky situations
- Usually free: Most brokers are paid by lenders, not you
- Ongoing support: Good brokers help you review and refinance over time
What to Look for in a Mortgage Broker
1. Proper Licensing
All mortgage brokers in Australia must be licensed. They should either hold their own Australian Credit Licence (ACL) or be an authorised Credit Representative of a licensee.
How to Verify
Check your broker's credentials on ASIC's Credit Representative register at asic.gov.au. They should provide their Credit Representative Number upfront.
2. Lender Panel Size
A larger panel means more options. Look for brokers with access to:
- Major banks (CBA, ANZ, Westpac, NAB)
- Second-tier lenders (Macquarie, ING, Suncorp)
- Specialist and non-bank lenders
Minimum recommendation: 20+ lenders for adequate comparison.
3. Independence
Independent brokers work for you, not a bank. Be cautious of:
- Brokers employed directly by a bank (they only sell that bank's products)
- Brokers who push one lender consistently regardless of your situation
Best Interest Duty
Since 2021, mortgage brokers have a legal "Best Interest Duty" to prioritize your interests over their own. This means they must recommend the most suitable product for you, not the one that pays them the highest commission.
4. Experience and Expertise
Consider brokers with experience in your specific situation:
- First home buyers: Knowledge of grants, stamp duty concessions, government schemes
- Self-employed: Understanding of low-doc loans and alternative documentation
- Investors: Loan structuring, tax implications, portfolio building
- Complex situations: Bad credit, multiple properties, unusual income
5. Local Knowledge
A broker familiar with your area understands:
- Local property values and trends
- Which lenders favour certain suburbs
- Local conveyancers, solicitors, and other professionals
Questions to Ask Your Broker
- "How many lenders do you have access to?" - Should be 20+
- "How do you get paid?" - Should explain commissions clearly
- "Why are you recommending this lender?" - Should relate to your needs, not their commission
- "What are the total costs, including fees?" - Not just the interest rate
- "What happens after settlement?" - Good brokers offer ongoing support
- "Can you provide references or reviews?" - Check Google reviews, testimonials
Red Flags to Avoid
Warning Signs
- Pressure tactics: Rushing you to sign or apply without explaining options
- Hidden fees: Not disclosing commissions or broker fees upfront
- One-size-fits-all: Recommending the same lender to everyone
- Poor communication: Slow responses, unclear explanations
- No credentials: Can't provide licence or credit rep number
- Suggesting dishonesty: Asking you to overstate income or hide debts
Understanding Broker Commissions
Brokers are typically paid by lenders through:
- Upfront commission: 0.5-0.7% of loan amount (e.g., $3,000-$4,200 on a $600k loan)
- Trail commission: 0.15-0.25% annually while loan remains active
These commissions don't cost you extra—they're built into the lender's pricing. Your broker must disclose exact commission amounts before you sign.
Signs of a Good Broker
- Takes time to understand your goals and situation
- Explains multiple options, not just one
- Provides clear, written comparisons
- Is responsive and communicates proactively
- Has positive reviews and testimonials
- Offers ongoing support after settlement
- Is transparent about how they get paid
The Initial Consultation
A good first meeting should cover:
- Your property goals and timeline
- Your financial situation (income, expenses, debts)
- Initial assessment of borrowing capacity
- Overview of suitable loan options
- Next steps and what documents you'll need
Most brokers offer free initial consultations with no obligation.
Why Choose an Independent Broker?
Independent brokers—those not owned by or contracted to a single lender—can offer truly unbiased advice. They're legally required to act in your best interest, and with access to multiple lenders, they can find the right fit for your situation.
Next Steps
- Check our client reviews to see what others say about us
- Book a free consultation to experience our approach firsthand
