Glossary · Australian property
Mortgage broker.
Licensed financial intermediary who sources loans across multiple lenders on behalf of a borrower. Regulated under the National Consumer Credit Protection Act 2009 and ASIC RG 209. Best-interests duty applies since 2021.
Brokers are legally distinct from lenders. They hold an Australian Credit Licence (ACL) or operate under one, must be MFAA or FBAA member, and since 2021 owe a best-interests duty (s158LA NCCP Act). They must place a borrower's interests over their own commission. They earn upfront commission (~0.4-0.7% of loan size) plus trail commission (~0.15-0.25%/year) paid by the lender, not the borrower.
Why use a broker vs going direct: lender policy varies materially (DTI limits, rental-income credit %, bonus credit, HECS handling, second-job income). The same borrower can get +$100-200K of borrowing capacity from one major over another. Brokers know the lender-policy landscape so they match. Going direct to your existing bank is simpler but optimises only their offering.
When to go direct: simple, owner-occupier refinance with no DTI complexity, you have time and appetite to compare lenders yourself, OR you have a strong existing relationship with a lender that offers the rate you want. For investment loans, complex serviceability, second/third IPs, or SMSF lending, broker channel is usually a clear win.
Worked example
$1.2M loan over 30 years at 6.4% via a broker who routed to a non-major willing to credit 80% of declared rental income. Same borrower at their incumbent major bank: capped at 75% rental income, lower borrowing capacity, would have needed to drop to a $1.05M loan or wait 6 months for an income-history refresh.
Source
National Consumer Credit Protection Act 2009 (Cth); ASIC RG 209 (responsible lending); MFAA + FBAA codes of conduct.
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