Mortgage broker vs bank
A bank can only sell you its own home loans. A mortgage broker compares loans from the lenders on their panel, must act in your best interests, and is usually paid by the lender rather than by you. Around three in four new home loans in Australia are now written through a mortgage broker.
General information only, not financial advice. Updated October 2026.
The short version
| Mortgage broker | Your bank | |
|---|---|---|
| Loans compared | Their lender panel, typically 20 to 40 lenders | That bank’s products only |
| Whose side | Legal best interests duty to you | No duty to recommend another bank’s loan |
| Cost to you | Usually nothing; paid a commission by the lender | Nothing; the bank is the lender |
| Paperwork | Broker prepares and lodges it, chases the lender | You deal with the bank directly |
| Unusual situations | Knows which lenders accept self-employed, low-deposit, visa or complex income cases | One credit policy; if you don’t fit, it’s a no |
| Speed | Depends on the lender chosen; broker tracks it | Can be quick for an existing customer with a simple loan |
What a mortgage broker does that a bank can’t
A bank lender’s job is to sell you that bank’s home loans. They can be helpful and competitive, but if a competitor has a better rate, a sharper cashback or a credit policy that suits your situation, they won’t tell you.
A mortgage broker is a licensed credit representative who works across a panel of lenders. They look at your income, deposit, property and plans, shortlist the lenders whose policies fit, compare the pricing, and then handle the application through to settlement. Since 2021 they must put your interests ahead of their own or the lender’s, which is a higher standard than a bank owes you.
Where brokers earn their keep is at the edges: self-employed income, a deposit under 20 per cent, a visa, a guarantor, an unusual property, or a refinance where the current lender is dragging its feet. Those are exactly the cases where a single bank’s policy says no and another lender says yes.
When the bank is the right call
- You already bank there, your finances are simple, and the rate they have offered is competitive when you check it against the market.
- You want a package deal (offset, credit card, fee waivers) that the bank prices well for existing customers.
- You are topping up or splitting an existing loan and the bank can do it with little paperwork.
Even then, asking a mortgage broker to check the bank’s offer costs nothing and takes a day or two.
How to choose a mortgage broker
Check they are on the ASIC register (every mortgage broker on BrokerScore is), read recent reviews, and ask how many lenders are on their panel and how they are paid. Then look at how quickly they reply: a broker who takes three days to answer an enquiry will be slow when your finance clause is ticking.
That is what the BrokerScore measures. Start with your suburb, or read our guide to how mortgage brokers are paid.
Common questions
Is it cheaper to use a mortgage broker or go direct to the bank?
Usually neither costs you more. Most mortgage brokers are paid a commission by the lender, not by you, and lenders offer the same rates through brokers as through their own branches, sometimes with broker-only discounts. The cost difference comes from which loan you end up in, and a broker can compare dozens of lenders where a bank can only show you its own.
Do mortgage brokers have to act in my best interests?
Yes. Since 1 January 2021, mortgage brokers in Australia have a legal best interests duty under the National Consumer Credit Protection Act. A bank lender does not owe you that duty; its staff can only recommend the bank’s own products.
Can a mortgage broker get a better rate than my bank?
Often, because they can compare the rate your bank offers against the rest of their panel and negotiate. Brokers also tend to know which lenders are pricing sharply this month. There is no guarantee, and the right loan is not always the lowest rate.
When is going straight to the bank the better choice?
When you have a simple, clean application, you already bank there, and the bank is offering a competitive rate or a package you want to keep. It can also be quicker for a small top-up on an existing loan. Even then, it costs nothing to ask a mortgage broker to check the offer.
Will a mortgage broker only recommend lenders that pay them more?
Commission rates are broadly similar across lenders, brokers must act in your best interests, and the commission they receive has to be disclosed in your credit guide and proposal. If a recommended lender pays a notably higher commission, the broker has to be able to show the loan is still the right one for you.
Can I use both?
Yes. Many people get a quote from their bank and ask a mortgage broker to compare it. A good broker will tell you if your bank’s offer is the one to take.
Find a mortgage broker near you
Every mortgage broker on BrokerScore is on the ASIC register. Compare their reviews, reply times and BrokerScore, then contact the one you choose for free.