Contact Info
- 96 Queen Park, Los Vegas, USA
- +1 800 555 44 00
- mail@example.com
- Office Hrs: Today 9.00am to 6.00pm
What is a Mortgage Broker And Should You Use One?
What is a Mortgage Broker And Should You Use One?
If you have ever tried comparing home loans on your own, you know how quickly the process becomes confusing. Different rates, different fees, different features, and different rules for approval. A mortgage broker’s job is to make that whole process simpler and help you find a loan that fits your situation, not just one that looks good on a rate sheet.
This guide explains what mortgage brokers do, how they work, and why many Australians choose to use one when buying or refinancing a home.
Written by: Glen Stokes
Published on 30 September 2025
What Is a Mortgage Broker?
A mortgage broker is a licensed professional who helps you find and set up a home loan. Instead of visiting banks one by one, a broker compares options across a panel of lenders and recommends loans that match your goals, borrowing capacity, and financial situation.
They work for you, not the bank. In Australia, brokers must follow the Best Interests Duty, which means they are legally required to recommend loan options that suit your needs.
If you want a deeper breakdown of how the full lending process works in detail, you can read our Complete Guide to Mortgage Brokers.
What Does a Mortgage Broker Actually Do?
A broker’s role covers much more than comparing interest rates. Here are the main things they handle for you.
1. Understand your financial position
They review your income, expenses, savings, debts, credit history, and goals to estimate what you can borrow.
Try our Borrowing Power Calculator for a quick estimate.
2. Compare lenders and loan products
A broker will assess home loans from a wide range of banks and non-bank lenders. They look at:
- • Interest rates
- • Fees
- • Loan terms
- • Repayment options
- • Offset and redraw features
- • Fixed, variable and split loan structures
3. Explain the differences in plain English
A good broker will talk you through the trade-offs, rather than just pushing the lowest rate. Structure, flexibility and fees often matter just as much.
4. Prepare and lodge your application
This includes collecting documents, packaging your application properly, and submitting it to the lender.
5. Liaise with lenders for you
They manage follow-ups, valuations and lender questions so you do not have to chase updates.
6. Support you through approval and settlement
They guide you from pre-approval to unconditional approval and finally to settlement day.
7. Ongoing support after settlement
Good brokers keep an eye on the market and can help you review or refinance your loan later on. You can book a Home Loan Health Check any time.
How Do Mortgage Brokers Get Paid?
In most cases, lenders pay brokers. You do not pay a fee for their services.
Upfront commission: A one-off payment when your loan settles.
Trail commission: A small ongoing payment for the time you keep the loan.
No direct cost to you: Most clients never pay a broker out of pocket.
Clawbacks explained simply: If you refinance too early, usually within 12 to 24 months, the lender may take back some of the commission it paid the broker. This is not charged to you.
Mortgage Broker vs Bank
Here is a simple way to understand the difference:
| Mortgage Broker | Banks |
|---|---|
| Compares multiple lenders | Offers only their own products |
| Must act in your best interests | Works for the bank |
| Helps with loan structure and features | Focuses on the bank's range only |
| Handles the admin for you | You manage the process |
| Can negotiate for better pricing | Less flexible on policy and pricing |
Here is a simple way to understand the difference:
Why Use a Mortgage Broker?
A mortgage broker can help you:
- – Save time by comparing multiple lenders quickly
- – Access a wider range of loan options
- – Understand the pros and cons of features like offsets or redraw
- – Improve your chances of approval by matching you to the right lender
- – Avoid costly mistakes
- – Get support throughout the entire process
It is not just about finding a low rate. It is about finding a loan that fits your life.
How Mortgage Brokers Work: The Step by Step Process
Here is the typical journey from your first chat to settlement.
1. Initial phone call or meeting
2. Review your financial situation
3. Estimate your borrowing capacity
4. Compare suitable lenders and loan structures
5. Provide a written recommendation
6. Prepare and lodge your application
7. Manage valuation and follow-ups
8. Receive unconditional approval
9. Settle the loan and finalise documents
10. Ongoing support whenever your situation changes
When a Mortgage Broker Is Especially Helpful
You will often benefit from using a broker if you are:
• Buying your first home
• Refinancing an existing loan
• Self-employed or have complex income
• Consolidating debts
• Looking to invest
• Unsure which loan features matter most
• Wanting help during interest rate changes
For refinancing help, see our Refinancing Services.
Benefits of Using a Mortgage Broker
A broker can help you:
• Access more lenders than you can on your own
• Get guidance on loan structure
• Understand LMI, deposits and rates
• Navigate different banks’ approval criteria
• Negotiate on pricing
• Avoid unsuitable products
• Review your loan in the future
Common Misconceptions About Brokers
“Brokers only chase the lowest rate.”
Not true. Many low-rate loans come with higher fees or unhelpful features. Structure matters.
“Brokers cost money.”
Most do not charge a fee. They are paid by the lender.
“Brokers work with every bank.”
They work with a panel of lenders but will still talk you through other options if needed.
Best Interests Duty Explained Simply
Brokers are legally required to act in your best interests when providing credit assistance. They must justify why a recommended loan is right for you and show how it compares to other suitable options. Banks do not have this obligation.
What Documents Do You Need?
Most lenders require:
• ID (driver licence or passport)
• Payslips
• Bank statements
• Existing loan or credit card statements
• Tax returns (especially if self-employed)
If you are preparing to apply, you can start with a Home Loan Pre-Approval through our services page.
Frequently Asked Questions
Is it cheaper to use a mortgage broker?
Often yes. Brokers compare lenders and can negotiate better pricing.
Do brokers get better rates?
They often access negotiated or discounted rates that are not advertised publicly.
Can a broker help if a bank declines me?
Yes. Every lender has different policies.
Do all brokers have the same lenders?
No. Each broker has their own lender panel.
Pre-approval vs unconditional approval?
Pre-approval means conditional agreement. Unconditional approval means the loan is formally approved and ready for settlement.
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.
