It's the question almost every new client wants to ask, and half of them apologise before asking it.
How does a mortgage broker get paid?
The short answer: the lender pays us, not you. When a loan settles, the lender pays the broker a commission from their own margin. For standard home loans there's no fee to the borrower, and your rate isn't higher because a broker was involved. Lenders price distribution into their business either way. Go direct and the bank keeps that margin. Use a broker and part of it funds your advice.
The longer answer is more interesting, because the structure is built to keep us honest.
Commission rates are broadly similar across lenders, and everything we earn is disclosed to you in writing before you proceed. Since 2021, brokers have also been bound by a legal Best Interests Duty. Not a slogan. A law. If two loans suit you differently, we're required to recommend the one that fits your situation, regardless of what either lender pays.
And there's a mechanism most people have never heard of: clawback. If a loan is refinanced or repaid within roughly the first two years, the lender takes back some or all of the commission. Which means a broker who places you somewhere unsuitable, chasing a quick settlement, can end up earning nothing at all. Our incentive is a loan that still fits you in year three, not one that just gets approved in week three.
None of this replaces asking the question. Ask it. Any broker worth working with will answer it without flinching.
If you've ever wondered what your broker earns on your loan, I'm happy to walk you through it line by line.
My Mortgage Concierge is licensed under ACL 392736 Sattout Accounting Services Pty Ltd. General information only — seek personal advice before acting.
