How much does a mortgage broker cost?

If you are thinking about using a mortgage broker, you’re probably wondering how much it is going to cost you.

The short answer is that for standard home loans, using a Loan Market broker costs you nothing.

You get dedicated support and step-by-step guidance from application to settlement without any charge from us.

Why is our service free for you?

We don’t charge you a fee because the lender pays us.

Banks and lenders rely on mortgage brokers to help borrowers find and prepare their loans. Because brokers do the heavy lifting – gathering paperwork, verifying financial records and structuring the application – the lender pays the broker a commission once the loan successfully settles.

In rare, complex scenarios, such as custom commercial lending or non-standard credit structures, a broker fee may apply. If your situation ever falls into this category, your broker will explain and agree upon any fee in writing before you do any work together. No surprise invoices, ever.

Mortgage brokers are legally bound under the Best Interest Duty (BID) to prioritise your financial interests above all else when recommending a home loan. This means a broker’s advice does not take into consideration any variance of commission between lenders.

How do brokers earn money?

Loan Market brokers are paid by the lender you choose. When your loan is officially settled, the lender pays your broker through two standardised, legally regulated forms of commission:

1. Upfront commission

This is a one-time payment made by the lender after your property settles.

It is calculated as a percentage of your loan balance minus any money held in an offset account (known as the net of offset).
Across the Australian lending market, upfront commissions generally range between 0.60% and 0.75% (including GST).
It can take up to 90 days post-settlement for the lender to release this payment.

2. Trail commission

Your selected lender may also pay an ongoing monthly payment (known as trail). This is to compensate your broker for providing ongoing service over the life of your mortgage – like regular rate reviews, repricing requests, and loan health checks.

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%.

Explaining net of offset

To understand how commissions work and how your savings directly affect what a broker receives, consider this example:

Loan Market mortgage broker George, helps his client settle a $800,000 home loan at a standard upfront commission rate of 0.65% (excluding GST).

Scenario A: No funds in an offset account
The commission is calculated on the full $700,000 loan amount.
$800,000 × 0.65% = $5,200 upfront commission

Scenario B: $75,000 in a linked offset account
Because the client keeps $75,000 in offset savings, the commission is calculated strictly on the balance ($725,000)

$725,000 × 0.65% = $4,712.50 upfront commission

Clawback

If a client refinances or pays out their loan within the first two years, lenders trigger what is known as a clawback, reclaiming some or all of this commission from the broker.

Typically, this will be:

100% within the first 12 months
50% within 12-24 months of the loan settlement date

If this does occur, there is no cost to you. However, your broker may not be paid for helping you with your loan.

Fast facts on mortgage broker commissions

The commission rates mortgage brokers receive from lenders are highly standardised across the market and highly regulated under law.
Mortgage brokers are legally required to disclose how their commission is structured and the percentage to their clients.
Mortgage broker commission is business revenue, not a salary. Out of their commissions, a broker pays for the costs of running their business, including:
- Licensing & aggregator fees: The software platforms, CRM systems, and aggregators required to submit bank applications.
- Mandatory regulatory costs: Australian Credit Licence fees, ASIC fees, Australian Financial Complaints Authority (AFCA) memberships, and Compensation Scheme of Last Resort (CSLR) levies.
- Operational costs: Professional indemnity insurance, secure client portals, commercial rent, hardware, and telecom.

Only once all these costs are paid, can a broker pay themselves.

FAQS

Common questions about mortgage broker fees.

How do I know what my broker is being paid on my loan?

Your broker will provide a Credit Proposal Disclosure document before your application is submitted. This document outlines the exact commission amounts the broker expects to receive from the lender upon settlement and on an ongoing basis.

What happens if I change my mind or my loan isn’t approved? Do I get charged a fee?

No. If you decide not to proceed with a purchase, change your mind, or your application isn’t approved, you won’t receive an invoice for our time. Loan Market brokers only get paid by the lender if and when your loan settles. Our preliminary advice, borrowing capacity assessments, loan pre-approval and loan comparisons are completely obligation-free.

Ready to find your

local expert?

Make it happen

Let us know what your goals are and we will connect you with a Loan Market broker directly.

Find a broker

Find a broker close to you, or set up a video call at a time that suits you.

You might find this

interesting

Borrowing power calculator

Find out how much you may be able to borrow to purchase property.

Budget planner calculator

Understand how much money you have coming in compared to what you spend using this calculator to help you identify where you could save.

Loan repayment calculator

Understand the amount you will need to pay your lender before you apply for a home loan and ensure you can comfortably meet your repayments.

Sarah and the team are extremely helpful. They're always very responsive and accommodating. They helped me settle on my first home as well as refinancing multiple times to make sure that I remained at a competitive rate with my lender. I recommend them to all my friends & will continue to use them again in the future.

Nitish and his team were absolute life savers. As a first time home buyer, the process of buying a property was daunting and scary as we didn’t know what was happening or what to expect. Nitish and his team were so patient, caring and supportive throughout the whole process. They worked in our favour, delivering the home loan that suited our needs. We couldn’t have picked a better team to help us reach our dream of buying our first home.

Dan & his team at Loan Market Double Bay have been absolutely phenomenal. The guidance & care I’ve received throughout the whole process has made me feel so reassured that I’m in the right hands. The speed in which everyone has worked has been incredibly impressive to witness & everyone has been so helpful with any questions I’ve had. Massive thank you to the whole team & an extra special shout out to Thep!