Need help getting a home loan? A qualified mortgage broker will help you with everything from finding a home loan through to organising your home loan application and settlement.
Brokers are especially useful if you're a borrower who needs a loan quickly or is in a unique or complex financial situation. Learn how to compare mortgage brokers, how much they cost and how to find a good broker near you.
Compare mortgage brokers
You can compare mortgage brokers in the table below and click "more info" to learn more about a particular company. If there's no green button on a broker it means we don't currently have a partnership with this broker. You can contact them directly on their own site.
How can a mortgage broker help me find a loan?
Finding a home loan can be a confusing and time-consuming process (although at Finder we think there's nothing stopping anyone from comparing rates and getting a good deal for themselves). Mortgage brokers exist to do it for you, and usually at no cost to you.
A mortgage broker is a licensed home loan expert. They have access to home loans from a panel of lenders and they will find mortgages for you and then help you with the application process all the way through to approval and beyond.
For borrowers who are busy or who find comparing home loans confusing, or maybe aren't even sure if they're eligible for a home loan, working with a broker can be very helpful.
How a mortgage broker got the loan approved after banks said no
Sometimes, a mortgage broker can make all the difference between being approved or rejected for a home loan. Graeme Holm, mortgage broker and founder, The Infinity Group, explains how he helped a self-employed couple working in hospitality to secure a loan during the pandemic.
"I had a couple aged in their early 30s who were seeking to purchase an owner occupier property Hinchinbrook, Sydney for $810,000. This was during the period where COVID was creating a lot of uncertainty in the market with lenders, especially for self-employed applicants.
"The applicants were initially declined, despite having a healthy deposit of $260,000.
"Conventional lenders had advised that they could not support the clients with this purchase due to their self-employed status and because the industry they were operating in was considered an 'at risk industry': they own and operate two cafes.
"We had approached a non-conforming lender who had also initially declined the deal for the same reason. However upon the strong argument I provided and my experience in the industry, they eventually agreed to take another look at the deal. They then formally approved the application for the client's home purchase.
"I had the head of credit in Australia decline the loan, but I convinced him to overturn the decline and approve the purchase loan! The clients were ecstatic with the outcome, as they have been looking to purchase a home for some time and finally found the perfect home."
Borrowers who could benefit by using a broker
While you can go it alone, there are some borrowers who are probably better off going straight to a broker. This includes:
- Borrowers with a poor credit history. Brokers are useful for borrowers with poor credit history or discharged bankruptcies. They can help you apply for regular home loans that you may qualify for or specific bad credit products.
- Borrowers on Centrelink or pensions. It's often possible to qualify for a loan while receiving welfare payments (and using some of the payment to count as income) but a broker can help you with eligibility requirements for relevant lenders.
- Older borrowers. Middle-aged borrowers can have difficulty getting approved for a home loan because they're older and have fewer working years to pay a loan back. Brokers have a good sense of which lenders may accept your application.
- Borrowers with complicated situations. If you're looking to set up a complex property investment strategy or have multiple loans then a broker is a really good idea. A broker can help you structure your loans in a more advantageous and cost-effective way.
How much does it cost me to work with a mortgage broker?
Brokers are usually free for borrowers to use, because they receive a commission from the lender you choose to go with. This means that brokers don't get paid unless your loan gets approved, which gives them a very big incentive to help you gain home loan approval.
There are two types of broker commission:
- Upfront commission. Upfront commission is the commission a mortgage broker receives for introducing the home loan customer to the lender. It is normally around 0.3-0.5% of the loan value. For example, for a $850,000 mortgage, a 0.3% commission would amount to approximately $2,550 in the broker's pocket.
- Trail commission. This is a recurring commission that is calculated based on the remaining loan amount each year, which is paid to them on a monthly basis. Some lenders offer an ongoing commission of 0.1-0.2% based on the remaining value of the home loan. This commission is paid for the broker providing ongoing service to the client.
Brokers may charge you a fee if they're providing more services, such as financial planning. Check with a broker before you employ their services to get a clearer idea of potential costs.
How do I know I've found a good broker?
There are many mortgage brokers working in Australia and you can compare and research them as you would other services:
- Ask for recommendations. Many of the best brokers source the majority of their business from referrals. Ask around and see if anyone you know has had some experience with a good mortgage broker.
- Check reviews. Put your broker's name into a search engine and read reviews from previous customers. This is a good way to get a sense of a broker's history and service.
- Check their accreditations. Your mortgage broker should be a qualified professional. You'll also want to ensure your broker is registered with the Australian Securities and Investment Commission (ASIC) either as a license holder or a credit representative. You can check ASIC's register here. Mortgage brokers are also required to be a member of an industry association, either the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).
- Do your own home loan research. Mortgage brokers may have access to hundreds of different loan products, but it doesn't hurt to spend a little time researching your options on your own as well. Remember, this is your mortgage and it will be with you for a couple of decades to come. Arming yourself with information will help both you and your broker.
- Approach more than one broker. Shop around and talk to a few brokers before deciding which one you want to go with.
How to find a broker near you:
Are there any downsides to using mortgage brokers?
Mortgage brokers do a lot of the legwork for you and may not charge you a cent. What can be wrong with that? It's definitely a good service, but there are some reasons why you might be better off just finding your own loan.
- A broker won't compare all loans. Mortgage brokers only compare lenders in their panel. That's usually a list of between 20 and 30 lenders, including the Big Four in most cases. While this gives you plenty of options it means you will likely miss out on the very lowest home loan rates from small online-only lenders that don't feature in broker panels.
- A mortgage broker is a middleman. A mortgage broker will liaise between you and the lender during the entire application process. You might not even deal with your lender until settlement or after. This makes it hard to get a sense of what your lender is like and you'll rely on your broker to answer your questions, at least initially.
- Not all brokers are equally good. As with any profession, some brokers are better than others. Some mortgage brokers run very small businesses and may be busy, or you may be dealing with an inexperienced broker who isn't sure how best to help you. Read customer reviews online and remember that you're not stuck with a broker. If you haven't submitted a full application you can easily look elsewhere.
Can mortgage brokers help with commercial loans?
A commercial mortgage is a loan that is borrowed for any non-residential property, such as:
- industrial premises
- retail shops
This can include the building in which you conduct your business, or a commercial investment property that you rent out to another business. Mortgages taken out on these kinds of buildings are used to purchase, refinance, or finance renovations to the interior or exterior of the building.
Commercial finance deals can be quite complex and difficult to navigate. This is why a good commercial broker can be useful if you wish to obtain commercial finance.
Many regular residential brokers also offer commercial finance, while some brokers specialise in arranging commercial loans.
Questions to ask a finance broker
When talking to a mortgage broker, whether you're looking to finance a commercial loan, your own home or an investment property, you should ask a few questions about the loans they're suggesting for you and their service overall. This will help you understand the broker process and the details of your loan.
Questions you should ask include:
- Do you charge a fee? While most mortgage brokers don't charge their clients, some do, so you should pose the question to the broker at the start so you're clear about all the costs involved.
- How many lenders do you have in your network? You want to ensure that the broker has a diverse range of lenders in their panel, including banks and non-bank institutions.
- How much commission do you make? To understand the mortgage broker's motivation, you should ask how their commission structure works. This may help you determine whether or not there is a conflict of interest at play.
- Is the interest rate on my loan permanent or just a promotion? Lenders often give new borrowers an attractive low rate to win their business. This low rate is normally temporary, and sees you revert to the lenders standard rate when the promotional period is over. Find out whether the advertised interest rate is permanent, and if it isn't what's the lenders standard variable rate. There's no point getting a great rate for a year if you're going to pay over the odds for the remaining term.
- How much of a deposit do I need? Ask how much of a deposit the lender wants, and find out whether the size of the deposit affects the interest rate of the loan. Sometimes a lender will give you a better rate of interest if you put down a larger deposit. A smaller deposit may also mean that you have to pay a lenders mortgage insurance (LMI) premium. Your broker should lay this all out for you in easy to understand language. If you want to get an estimate of your LMI premium, you can use our handy LMI calculator.
- Can I make extra repayments and/or repay my loan early? The quickest way to repay your mortgage and save money in interest is to make overpayments whenever possible. Double check your lender is happy for you to do this without penalty. Some lenders charge an admin fee to process the additional payment. Whilst you're on the subject of overpayments you should also find out whether your monthly payments adjust in line with any additional payments you make.
Compare home loans directly from lenders
While mortgage brokers can help you get a home loan, there's nothing stopping you from doing it yourself. Here's a selection of loans from different lenders. Even if you end up using a broker, it's good idea to compare some options in advance. This way you can be confident your broker is giving you some competitive options.