How Much Does a Mortgage Broker Cost in Australia?

In Australia, residential mortgage brokers are typically paid by the lender, not the borrower. When your loan settles, the lender pays the broker an upfront commission (commonly around 0.55% to 0.65% of the loan amount, plus GST) and a smaller trail commission each year the loan stays active (commonly around 0.15% to 0.20% per year). This is built into the lender's cost of acquiring customers. Importantly, the rate you are offered is the same whether you go through a broker or walk into the branch. Lenders cannot legally inflate your rate to recover the broker commission, and most major banks publish the same panel rates either way. This means a borrower with a $600,000 loan typically pays $0 to the broker for the broker's time, lender comparison, application preparation, and ongoing support. The broker is paid by the bank you choose, but their legal duty under Best Interests Duty is to you, not the lender. If a broker tells you upfront that you will be charged a fee, ask them to explain why and put it in writing in their Credit Quote before you sign anything.

There are limited situations where a broker may legitimately charge a fee: • Commercial or business loans, where lender commissions are smaller or absent • Specialist or non-conforming loans (for example, after default, bankruptcy, or for unusual income structures) • Very small loans where the commission would not cover the work involved • SMSF loans, bridging finance, or complex private lending • Clawback recovery, where you discharge the loan within 18 to 24 months and the lender claws back the broker's commission Where a fee applies, it is usually a flat fee in the range of $500 to $3,000, or sometimes a percentage of the loan, and it must be disclosed in writing in the Credit Quote and Credit Proposal Disclosure documents the broker provides before you commit. ASIC requires this transparency. If you are getting a vanilla owner-occupied or investment loan from a major lender, you should not be paying a broker fee.

Since January 2021, mortgage brokers in Australia have been bound by the Best Interests Duty (BID) under the National Consumer Credit Protection Act. This is a legal obligation to act in the borrower's best interests, not their own commercial interest. In practice, this means a broker cannot recommend a lender simply because they pay higher commission. The broker has to evidence why the recommended loan suits your goals, your repayment capacity, and your circumstances. They must compare options, document their reasoning, and prioritise your outcome. ASIC supervises the obligation and brokers face significant penalties for breaches. Banks selling directly are not bound by Best Interests Duty in the same way. A bank's mobile lender or branch lender can only recommend their own products, even if a different lender would suit you better. They also have sales targets and product preferences that can influence what they offer. This is one of the strongest practical reasons to use a broker: regulated comparison across many lenders, with a written duty to put you first. The broker's compliance file documents the reasoning behind the recommendation, which protects you and the broker if the loan is later questioned.

Before engaging a broker, ask these five questions: • How many lenders are on your panel, and which ones did you compare for me? • Will I be charged any fee directly? If yes, how much and when? • What commission will you receive from the lender I choose? • What happens if I refinance or sell within two years (clawback)? • Are you a member of the MFAA or FBAA, and what is your credit licence number? A reputable broker will answer all five clearly and provide written disclosure documents (Credit Guide, Credit Quote, Credit Proposal Disclosure) covering commissions and any fees. If the answers feel evasive or rushed, that is a signal to slow down. You can also check the broker's Australian Credit Licence (ACL) or Credit Representative number on the ASIC Professional Registers. Membership of the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA) signals professional standards and ongoing training.

This is general information only, not personal credit advice. Your actual options depend on your full financial picture, including your income, deposit, credit profile, and the specific loan structure you need. Speak with a licensed broker for advice tailored to your situation.