How Do Mortgage Brokers Get Paid?

By Shane | Mortgage Brokers

Mar 11

Mortgage brokers play a crucial role in the Australian real estate market by helping individuals and businesses find the most suitable home loan options available to them. They are trained and licensed professionals who work with various lenders to find the best possible deal for their clients. But how do they get paid? This blog will explore the different ways mortgage brokers get paid in Australia.

Commission-Based Model

The most common way mortgage brokers get paid in Australia is through a commission-based model. This means that they receive a commission from the lender when their client takes out a loan through them. The commission percentage varies from lender to lender and is usually a percentage of the loan amount. For example, if a client takes out a $500,000 home loan, the broker might receive a commission of 0.6% to 0.8%, which equates to between $3,000 and $4,000. The commission payment is usually made by the lender to the broker after the settlement of the loan.

Some lenders may offer higher commission rates to brokers for promoting specific loan products or packages. However, this can create a conflict of interest as the broker may be incentivized to recommend a loan that is not in the client’s best interest. To prevent this, the Australian Securities and Investments Commission (ASIC) has implemented regulations that require brokers to disclose any commission incentives they receive from lenders as well as act in the best interests of their clients.

Fee-For-Service Model

Another way mortgage brokers can get paid is through a fee-for-service model. This means that the broker charges their clients a fee for their services instead of receiving a commission from the lender. The fee can be a one-time payment or an ongoing fee for the duration of the loan. The amount of the fee varies from broker to broker and can range from a few hundred dollars to several thousand dollars.

The advantage of this model is that the broker is not influenced by commission incentives and can focus solely on finding the best loan options for their clients. However, it may be more expensive for the client to use this model, and they may not be willing to pay the extra fee.

Hybrid Model

Some mortgage brokers in Australia use a hybrid model, which combines both the commission-based and fee-for-service models. This means that the broker receives a commission from the lender and also charges their client a fee for their services. The advantage of this model is that the broker has a steady income stream from both sources and can provide a more comprehensive service to their clients.


In conclusion, mortgage brokers in Australia can get paid through a commission-based model, fee-for-service model, or hybrid model. To ensure that brokers provide objective advice, ASIC has implemented regulations that require brokers to disclose any commission incentives they receive from lenders and to act in the best interests of their clients. When choosing a mortgage broker, it is essential to understand how they are paid and what fees they may charge you for their services.

Shane
Author: Shane

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