Understand the pros and cons of working with a broker versus going directly to a bank.
When it comes to securing finance, Australian borrowers can choose to walk into a local bank branch or partner with a mortgage broker.
While both paths can lead to a loan, the journey, choice and long-term financial outcomes are vastly different.
According to the latest data from Cotality, commissioned by the Mortgage & Finance Association of Australia (MFAA), Australian mortgage brokers now facilitate over 80% of all new residential home loans (June 2026 quarter data).
Going direct to a bank limits you to one lender’s products, policies and rates. A broker, on the other hand, has access to loans from dozens of lenders. Working with a Loan Market broker has access to 100+ lenders, including major banks, regional lenders and specialist providers. That means you’re more likely to find a loan that fits your needs and circumstances.
When you speak to a bank officer, their job is to sell their bank’s products. When you work with a broker, their legal obligation is to you. Under Australian law, mortgage brokers operate under the statutory Best Interests Duty (BID). This means brokers are legally required to prioritise your interests above their own and provide documented proof of why a recommended loan is right for you. Banks are exempt from this law.
A broker takes the time to understand your goals and financial position before making recommendations. They’ll explain the pros and cons of different options and help you understand how each feature might fit your situation.
The numbers tell the story. More Australians are choosing brokers for the expert help, wider choice and smoother experience they provide.
A broker manages the paperwork, liaises with the lender and keeps the process on track from pre-approval to settlement. This saves you time, reduces your stress and minimises the chance of errors or delays.
For standard home loans, using a broker costs you nothing*. Brokers get paid by the lender you choose. If a service is a little more complex and fees are involved, you will be told upfront so you can make an informed decision.
*Your broker may charge a fee to cover additional time required. Any fees will be discussed with you in advance so you can make an informed decision before proceeding with your application.
Some potential pros of going directly to a bank include:
Some potential cons of going direct to a bank include:
Some potential pros of using a mortgage broker include:
Some potential cons of using a mortgage broker include:
Loan Market brokers are paid by the lender you choose (with no additional cost to you*). When your loan ‘settles’, the lender will pay the broker an initial payment as a percentage (%) of the ‘net of offset’ (total loan, less any amount in the linked offset account). This percentage varies by lender but generally ranges between 0.60% and 0.75% (includes GST).
If the loan is transferred or is paid out within 2 years of the settlement date, the lender may reclaim some or all of these commissions. This is known as ‘clawback’.
The selected lender may also pay an ongoing monthly payment (known as trail). This is a percentage (%) calculated and paid on the outstanding balance of your loan at the end of each month. The percentage varies by lender but is typically around 0.15%.
It is important to note that a Loan Market broker’s advice is always aligned to your best interests and does not take into consideration any variance of commission between lenders.
*In rare, highly complex or commercial scenarios, a broker fee may apply, but this is always fully disclosed upfront.
The Best Interests Duty is a legal framework introduced by the Australian Government in 2021. It mandates that mortgage brokers must act in the best interests of consumers when providing credit assistance. If a broker recommends a loan that isn’t suited to your needs or is unnecessarily expensive, they face severe regulatory penalties. Bank employees are exempt from BID because, legally, they represent their employer (the bank), not the customer.
In many cases, yes. First home buyers often struggle with government grant eligibility and deposit requirements, while self-employed borrowers face strict document requests from traditional banks. A Loan Market broker knows the credit policies of 100+ lenders. We direct your application to the specific lender whose criteria match your income structure, avoiding unnecessary rejections and protecting your credit score.
Let us know what your goals are and we will connect you with a Loan Market broker directly.
Find a broker close to you, or set up a video call at a time that suits you.
