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The Complete Guide to Mortgage Brokers in Melbourne
The Complete Guide to Mortgage Brokers in Melbourne
Buying a home or refinancing your loan is one of the biggest financial moves you’ll ever make. It can also be one of the most complicated. Between lenders, loan types, government schemes, and stacks of paperwork, it’s easy to feel overwhelmed before you’ve even started.
That’s where a mortgage broker comes in. Instead of approaching banks one by one, a broker compares your options, explains what suits your circumstances, and manages the process from start to finish.
This guide is for Melbourne buyers and homeowners who want straight answers and practical advice. No jargon, no sales pitch, just the kind of guidance I give my own clients when they sit down at my kitchen table for a chat about their goals.
Written by: Glen Stokes
Published on 30 September 2025
Table of Contents
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Mortgage Broker Basics
What is a Mortgage Broker?
At its simplest, a mortgage broker connects you with a lender. But in reality, the role goes much deeper. A good broker helps you:
• Work out how much you can borrow.
• Compare loans across banks and non-bank lenders.
• Explain the pros and cons of different loan structures.
• Handle the paperwork and keep the process moving.
Here's a real-life example for context:
I recently worked with a couple in Preston who had been saving for years to buy their first
home. Their bank offered them one fixed-rate loan. The repayments were manageable, but
the bank never mentioned that an offset account could save them thousands in interest. By
comparing across lenders, I found them a loan with an offset facility and more flexible
repayment terms. They’re now paying down their mortgage faster than expected.
How Are Mortgage Brokers Paid?
Most brokers are paid by the lender when your loan settles. You usually don’t (and shouldn’t) pay out of
pocket. Simply put, a Mortgage Broker gets paid a commission by the lender for arranging the home loan, not by the client.
• Upfront commission: A one-off payment when your loan is settled, which is usually a small percentage of the total loan amount.
• Trail commission: Ongoing payments the broker receives from the lender while you keep the loan, as long as it remains active.
• No Client Fee: You do not typically pay a direct fee for a mortgage broker’s services, as their payment comes from the lender.
Important Considerations:
Transparency: Good brokers are upfront about how they get paid. They’re legally required to explain their commission structure, so you’ll always know exactly who’s paying them and how much.
Clawbacks: If you refinance or pay off your loan early (usually within 12–24 months), the lender can take back part of the broker’s upfront commission. This is called a “clawback.” The broker has to wear this cost, and they’re not allowed to pass it on to you.
Lender vs Broker Choice: Even though lenders pay the commissions, strict regulations are in place to make sure brokers recommend loans that are right for you, and not just the ones that pay them the most.
At Keystone Mortgage Brokers, all commissions and fees are disclosed upfront, so you know exactly how it works. Transparency matters – if a broker avoids the question, that’s a warning sign.
Why should I use a broker instead of a bank?
Banks can only offer their own products. A broker has access to a wider panel of lenders and can explain how different options actually affect your situation. For example, is a honeymoon rate worth it if repayments jump in two years? Is a redraw facility better than an offset account for your lifestyle? A broker cuts through the jargon.
Mortgage brokers are also motivated to find you a loan that you can consistently manage in the long term, where you’ll be at low risk of finding a better deal elsewhere. Retrospectively, banks are motivated to provide better deals to clients coming through a broker, as they understand the broker is comparing them to other competitors.
Are brokers better for first-home buyers?
Yes. First-home buyers face unique challenges – from understanding government grants and concessions to navigating auctions. A broker can explain these and structure your application so you don’t miss out.
For example, I’ve helped clients secure the First Home Buyer Duty Exemption in Victoria simply by timing their application correctly. That saved them thousands in upfront costs.
I'm looking to apply for a home loan. What documents do I need?
You’ll need to provide:
• Identification (passport or driver’s licence).
• Recent payslips.
• Bank statements.
• Tax returns (especially if self-employed).
Every situation is different, so I provide a tailored checklist so you know exactly what’s required.
How long does it take to process my mortgage application?
Some banks can take weeks to assess applications. Others are faster. If your documents are in order, I can often arrange pre-approval in a matter of days. Having a broker matters here because part of my job is following up with lenders and making sure your file doesn’t sit idle.
Related reading: Understanding the Difference Between the Cash Rate and Interest Rates
Choosing the Right Broker
Not all brokers operate in the same way. Choosing the right one is about trust, transparency, and whether they understand your goals.
The Broker Checklist
Before you commit, check that your broker:
• Is licensed and listed on the ASIC register.
• Knows the Melbourne property market, not just loan products.
• Has positive reviews and proven experience.
• Provides written comparisons and recommendations.
• Is actively sharing information and educating their clients about property lending.
Red Flags to Avoid
If you notice any of these, tread carefully:
Limited lender panel: If they only work with one or two banks, you’re not really getting comparisons.
Lack of transparency: If they can’t clearly explain how they’re paid, move on.
No written advice: Verbal recommendations aren’t enough. You should always get it in writing.
Rushed process: If they don’t take time to understand your situation, they’re probably fitting you into a product rather than tailoring advice to you.
Here’s A Real Example:
A client from Brunswick came to me after another broker said they only qualified for one loan with one lender. That broker hadn’t considered non-bank lenders, which at the time were offering more competitive rates. After a full comparison, we secured them a loan with lower repayments and more flexible features.
Start with a Home Loan Health Check if you already have a mortgage and want to see if it still stacks up.
What a Mortgage Broker Actually Does
Think of a mortgage broker as both a guide and a negotiator. Here’s the process from start to finish:
Initial consultation: Reviewing your income, savings, debts, and goals.
Loan comparisons: Shortlisting lenders and products that fit your profile.
Pre-approval: Preparing your documents and securing conditional approval.
Application management: Lodging the application, negotiating with the lender, and keeping you updated.
Approval and settlement: Securing final approval, checking loan documents, and supporting you through settlement.
For example, a recent client looking for refinancing in Reservoir was juggling two credit cards, a personal loan, and a home loan. Their bank wouldn’t consolidate the debts. By working across lenders, I found a solution that rolled everything into one home loan, cutting their monthly repayments by nearly $600.Try the Borrowing Power Calculator to get a sense of where you stand before starting.
Loan Types and Comparisons
There are three main loan types most Melbourne buyers consider.
| Loan Type | Key Features | Pros | Cons | Best For |
| Fixed | Interest rate locked for 1–5 years | Predictable repayments | Less flexibility, break fees | Buyers wanting certainty |
| Variable | Rate changes with the market | Flexible, extra repayments allowed | Repayments fluctuate | Buyers comfortable with change |
| Offset | Linked savings reduce interest | Can save thousands long term | May have higher fees | Buyers with steady savings |
Each loan type comes with trade-offs. For example, fixed loans suit buyers who want certainty but can sting if you repay early. Variable loans give flexibility but can rise suddenly. Offset accounts are powerful tools if you consistently keep money in savings.
Additional Costs to Consider When Buying a Home
Your deposit isn’t the only cost. Buyers and refinancers should factor in:
Upfront costs: Deposit, stamp duty, conveyancing, pest and building inspections.
Loan costs: Application fees, valuation fees, Lenders Mortgage Insurance (LMI) if borrowing over 80%.
Ongoing costs: Package fees, account-keeping fees.
Ownership costs: Council rates, strata, insurance, maintenance.
In Melbourne, stamp duty is often the biggest shock. For a $700,000 property, stamp duty can be over $37,000. First-home buyer concessions and schemes can help reduce this, but it’s worth planning ahead.
Buying Your First Home in Melbourne
Buying your first home is exciting, but it comes with plenty of moving parts.
Step 1: Work out costs
Use the Loan Repayment Calculator and Stamp Duty Calculator to get a clear picture.
Step 2: Save a deposit
Most lenders want 5–20%. Government schemes can reduce this, but you’ll need to meet eligibility criteria.
Step 3: Research suburbs
Attend open homes and track recent sales to see real prices. Auction clearance rates in Melbourne are often high, so knowing the market is critical.
Step 4: Choose your support
Understand the difference between a broker, financial advisor, and buyer’s agent.
Step 5: Pick your loan type
Fixed, variable, or offset. Each has strengths depending on your lifestyle.
Step 6: Get pre-approval
Having this in place gives you confidence at auctions and speeds up settlement.
Step 7: Make your purchase
Submit your offer or bid at auction, then negotiate settlement terms.
Step 8: Finalise settlement
Pay stamp duty, sign documents, and collect your keys.
Read more:
9 Tips to Get Properly Organised Before You Buy Your First Home
Understanding the Expanded 5% Deposit Scheme
Refinancing and Reviewing Your Home Loan
Circumstances change, and so should your loan. Refinancing can:
• Lower repayments.
• Access equity for renovations.
• Consolidate debts into one repayment.
When does refinancing make sense?
• Interest rates have shifted.
• Your fixed term is ending.
• Your goals have changed (renovation, investment, or downsizing).
Risks to consider
• Break fees on fixed loans.
• Setup costs on new loans.
• Extending your loan term may mean paying more interest long-term
A Real Example:
I worked with a family in Reservoir who had a home loan at 5.8% interest. By refinancing, we dropped their rate by over 1%, saving them $350 a month. That money is now going straight into their kids’ education fund.
Equity explained
Equity is the difference between your property’s value and what you owe on it. Refinancing can unlock equity, which can then be used for renovations, investments, or major expenses.
Related reading:
Why Consolidating Debt Into Your Home Loan Makes Good Sense
Using the Equity in Your Home to Fund Life’s Big and Small Goals
More on Refinancing Services.
Specialist Lending Solutions
Mortgage brokers don’t always just handle home loans. Many mortgage brokers can use their skills to help you access a range of financial options:
These require the same careful comparisons as home loans, especially when juggling multiple commitments. It’s usually a good sign to see a mortgage broker who can handle more specialised services, as it demonstrates a level of expertise and experience in navigating complex financial matters.
However, it’s important to gain transparency on the role of your mortgage broker when you’re dealing with finance outside of homes. Some mortgage brokers may offer these services as a private lender, others may offer them by leveraging the equity available on your mortgage.
Melbourne Property Market Context
The Melbourne market is competitive and constantly shifting.
Auctions dominate: Being pre-approved gives you confidence to bid.
Stamp duty costs: One of the highest in the country, but concessions exist.
Apartment lending: Some lenders are stricter on smaller apartments.
Local knowledge matters: Knowing how banks view different property types in suburbs like Brunswick versus Reservoir makes a difference.
Frequently Asked Questions
Can I get a loan if I’m self-employed?
Yes, but the process can be a bit more involved. Lenders typically want to see two years of tax returns, BAS statements, and business financials to assess income stability. Some lenders also offer low-doc loans, but these can come with stricter terms. A broker can help package your application to highlight financial strengths.
How many lenders do you work with?
I work with a wide panel of both major banks and non-bank lenders. This means I’m not tied to one institution’s products, and I can compare a broad range of loan options to find one that suits your goals. This variety often leads to better rates, features, and approval flexibility for my clients.
What’s the difference between conditional and unconditional approval?
Conditional approval, often called pre-approval, means the lender has assessed your application but still needs certain conditions met before fully committing. Unconditional approval means your loan has been formally approved and the lender is ready to release funds. Having unconditional approval is crucial before signing contracts or bidding at auction in Melbourne’s fast-moving market.
Can I buy at auction without pre-approval?
Technically yes, but it’s risky. In Victoria, auction sales are unconditional, so you can’t back out if finance falls through. Pre-approval gives you a clear borrowing limit and allows you to bid with confidence. It also speeds up settlement, which can make your offer more appealing to sellers competing in Melbourne’s busy property market.
What is Lenders Mortgage Insurance (LMI)?
LMI is a one-off premium that protects the lender if you default on your home loan. It applies when your deposit is less than 20 percent of the property’s value. While it doesn’t protect you as the borrower, it can help you buy sooner by reducing the required deposit. Some government schemes can offset this cost.
Can I refinance with the same lender?
Yes, and in some cases it’s a smart move. Your current lender may offer you a better rate or updated features to keep your business. However, it’s always worth comparing the wider market. A broker can use competing offers as leverage to negotiate with your existing bank, often securing better outcomes without switching.
How often should I review my loan?
It’s a good idea to review your home loan every two to three years, or sooner if your circumstances change. Interest rates and lending policies shift regularly, and a loan that was competitive when you signed up may no longer offer the best value. Periodic reviews can reveal opportunities to refinance or renegotiate.
What’s the difference between an offset account and a redraw facility?
Both help reduce the interest you pay, but they work differently. An offset account is a savings or transaction account linked to your home loan. The balance offsets your loan principal, lowering interest charged. A redraw facility lets you access extra repayments you’ve made. Offset accounts tend to offer easier day-to-day access to funds.
Final Thoughts
At the end of the day, I see my role as more than just securing a loan. It’s about building a long-term partnership where you know you’ve got someone in your corner, making sure your mortgage works for you and your lifestyle, today and down the track.
I’m Glen from Keystone Mortgage Brokers. With over 18 years helping Melbourne buyers, homeowners, and investors, I’ve seen the good, the bad, and the confusing parts of dealing with lenders. My job is to cut through the jargon, explain your options clearly, and get you a loan that actually fits your life.
Whether you’re buying your first home, refinancing, or exploring investment opportunities, this guide gives you the foundation. When you’re ready to take the next step, start with a Home Loan Health Check or get in touch and we’ll talk through your plans.
Written by Glen Stokes
Glen Stokes is the founder and principal broker at Keystone Mortgage Brokers, based in Preston, Victoria. With over 18 years of experience in lending and a strong background in banking and finance, Glen offers a practical and personalised approach to home loans, refinancing, and property investment. He’s passionate about helping everyday Australians—from first home buyers to seasoned investors—navigate their financial journeys with confidence and clarity. When he’s not crunching numbers, Glen’s a hands-on dad of three, dog-walker, and local coffee enthusiast committed to making the loan process simple, stress-free, and tailored to your life.
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