Mortgage Broker vs Bank: Which Is Better for Your Home Loan in 2026?
Compare using a mortgage broker versus going directly to a bank for your home loan in Australia. Understand fees, access to lenders, service differences, and when each option is best.
In 2026, 74% of all new home loans in Australia are arranged through mortgage brokers rather than directly through banks. This figure has grown steadily from 55% a decade ago, driven by best-interest duty legislation, wider lender panels, and the reality that Australian borrowers now have access to over 80 lenders — far too many for any individual to compare on their own.
But going through a broker is not always the right choice. This guide compares both options so you can make an informed decision.
Mortgage Broker vs Bank: Quick Comparison
| Factor | Mortgage Broker | Direct to Bank |
|---|---|---|
| Number of lenders | 20–60+ on panel | 1 (their own products) |
| Cost to you | Free (broker paid by lender) | Free |
| Best interest duty | Yes (legally required since 2021) | No (bank sells own products) |
| Speed | Varies — depends on broker workload | Can be fast for simple applications |
| Specialisation | Can find niche lenders for complex income | Limited to own credit policy |
| Ongoing service | Annual review, rate negotiation | Branch or call centre support |
| Conflict of interest | Lender commissions (disclosed) | Sales targets for own products |
| After-hours availability | Often available evenings/weekends | Branch hours only (usually) |
How Mortgage Brokers Work in Australia
A mortgage broker is a licensed professional who assesses your financial situation and recommends home loan products from multiple lenders. Since 1 January 2021, Australian mortgage brokers operate under a Best Interest Duty — a legal obligation to act in the borrower's best interest, not the lender's.
How Brokers Get Paid
Mortgage brokers are paid by the lender, not by you. The standard commission structure is:
- Upfront commission: 0.5%–0.7% of the loan amount (paid at settlement)
- Trail commission: 0.15%–0.25% of the outstanding balance per year (ongoing)
For a $600,000 loan, this means the broker receives approximately $3,000–$4,200 upfront and $900–$1,500 per year in trail.
Important: The Best Interest Duty means brokers cannot recommend a product simply because it pays a higher commission. All commissions must be disclosed to you.
What a Good Broker Does
- Assesses your borrowing power across multiple lenders (each has different credit policies)
- Compares rates and features from their panel of 20–60+ lenders
- Handles the paperwork — application, supporting documents, lender communication
- Negotiates on your behalf — rate discounts, fee waivers, policy exceptions
- Provides ongoing service — annual reviews, refinancing when better deals emerge
When a Mortgage Broker Is the Better Choice
Complex Income Situations
Self-employed borrowers, contractors, borrowers with multiple income streams, or those with irregular income benefit significantly from a broker. Different lenders have wildly different policies for assessing non-standard income. A broker knows which lenders are most favourable for your situation.
First Home Buyers
Navigating FHOG eligibility, stamp duty concessions, LMI thresholds, and guarantor loan structures for the first time is overwhelming. A broker guides you through every step and ensures you access all available grants and concessions.
Investment Property Purchases
Tax implications, negative gearing strategies, cross-collateralisation risks, and portfolio structuring all benefit from broker expertise. Some lenders are more investor-friendly than others.
Refinancing
If your current lender's rate is no longer competitive, a broker can quickly compare your existing loan against the market and handle the switch — often saving thousands per year.
When Time Is Limited
Brokers do the legwork. If you don't have time to research 80+ lenders, compare 200+ products, and negotiate rates, a broker compresses this into one meeting.
When Going Direct to a Bank May Be Better
Simple Borrowing Needs
If you have straightforward PAYG income, a clean credit history, and a standard loan requirement, going directly to your existing bank can be faster — especially if you already have a relationship with a personal banker.
Access to Exclusive Products
Some banks offer products exclusively to direct customers. For example, certain offset accounts, package discounts, or fixed rate specials may not be available through broker channels.
Existing Relationship Benefits
If you have significant deposits, business banking, or other products with a bank, they may offer preferential pricing that a broker cannot access.
Fast Pre-Approval
For auctions with tight timelines, going direct to a bank you already hold accounts with can sometimes produce faster pre-approval than going through a broker — though this varies widely.
Key Questions to Ask a Mortgage Broker
Before engaging a broker, ask:
- How many lenders are on your panel? (Look for 20+ minimum)
- Do you specialise in any borrower type? (First home buyers, investors, self-employed)
- What is your typical turnaround time for pre-approval?
- How do you get paid, and will you disclose all commissions?
- Will you help me with the ongoing loan management (annual reviews)?
Key Questions to Ask a Bank
Before going direct, ask:
- Is this rate available through broker channels? (If yes, a broker offers the same rate plus comparison)
- Are there any direct-only products or discounts?
- What is the comparison rate? (Includes fees, not just the headline rate)
- Can I speak to the same person throughout the process?
The Verdict: Broker or Bank?
For most Australian borrowers in 2026, a mortgage broker provides better outcomes. The combination of multi-lender comparison, best interest duty, free service, and specialist knowledge means brokers consistently deliver more competitive rates and better-structured loans than borrowers find on their own.
The exception is borrowers with very simple needs who already have a strong relationship with a specific bank offering genuinely competitive direct-only products.
The best approach? Start with a broker to understand your options, then check whether your bank can beat the broker's recommendation.
Frequently Asked Questions
Do mortgage brokers charge fees?
The vast majority of Australian mortgage brokers do not charge the borrower any fee. They are paid by the lender. A small number of brokers charge a fee-for-service model — this should always be disclosed upfront.
Can a broker get me a better rate than the bank directly?
Often yes. Brokers negotiate across multiple lenders and can leverage competitive tension. Some lenders also offer broker-exclusive rates.
Is it worth using a broker for refinancing?
Absolutely. Brokers can quickly compare your existing loan against the current market and handle the entire refinancing process, often saving $2,000–$5,000 per year.
How do I find a good mortgage broker?
Look for brokers who are members of the MFAA or FBAA, have positive Google reviews, and specialise in your borrower type. Platforms like CREDIGO let you browse verified, licensed mortgage brokers and filter by specialisation and location.
This article is general information only and does not constitute financial advice. CREDIGO is a digital marketplace operated by EMERGUS CAPITAL PTY LTD (ABN 65 669 945 000). We do not hold an ACL or AFSL. Always seek advice from a licensed mortgage broker or financial adviser.