Using a Mortgage Broker: How To Use a Broker to Get a Better Deal on Your Home Loan

By Shane | Mortgage Brokers

Mar 09

Buying a home is one of the most significant investments that many people will make in their lifetime. However, the process can be overwhelming and stressful, especially when it comes to finding the right home loan. This is where a mortgage broker can be a valuable asset. In Australia, mortgage brokers are licensed professionals who act as intermediaries between borrowers and lenders. They help borrowers find and secure the right home loan based on their financial situation and needs.

In this blog, we will explore the benefits of using a mortgage broker in Australia and provide tips on how to choose the right broker for a successful home-buying experience. Whether you’re a first-time homebuyer or a seasoned homeowner, our aim is to help you understand the advantages of working with a mortgage broker and how they can help you navigate the complex process of securing a home loan.

The Role of a Mortgage Broker

In Australia, a mortgage broker is a professional who acts as an intermediary between a borrower (often a homebuyer) and a lender (such as a bank or credit union). The primary role of a mortgage broker is to help their clients secure a home loan that is suitable for their needs and financial circumstances.

Here are some specific responsibilities that a mortgage broker in Australia may undertake:

Assessing a borrower’s financial situation:

Mortgage brokers typically begin by meeting with their clients to discuss their financial situation and goals. They may review the client’s income, assets, debts, and credit history to help determine how much they can afford to borrow and what type of loan would be best for them.

Comparing loan options:

Mortgage brokers can access a range of home loan products from different lenders and compare the features, fees, and interest rates of each. They may also have access to exclusive deals or promotions that are not available to the general public.

Advising on loan structure:

A mortgage broker can help a borrower understand the different types of loan structures available, such as variable or fixed interest rates, offset accounts, or redraw facilities. They can also explain the pros and cons of each option and help the borrower choose the most suitable loan structure for their needs.

Managing the application process:

Once a borrower has decided on a home loan product, a mortgage broker can help them complete the application process and liaise with the lender on their behalf. This can include submitting documentation, following up on progress, and ensuring the loan is settled on time.

Providing ongoing support:

A good mortgage broker will typically continue to provide support and advice to their clients even after the loan has been settled. They may assist with refinancing, negotiating better interest rates, or helping with any issues that arise with the loan over time.

Overall, the role of a mortgage broker in Australia is to help borrowers navigate the complex world of home loans and find the best possible solution for their individual needs.

Benefits of Using a Mortgage Broker

Buying a property is one of the biggest investments that most Australians will make in their lifetime. For most, obtaining a mortgage is an essential step in this process. However, navigating the complex and constantly evolving world of mortgage lending can be overwhelming and time-consuming. That’s where a mortgage broker can help.

Access to a wide range of lenders and products

Mortgage brokers work with a wide range of lenders and products, including major banks, credit unions, and specialist lenders. They have access to a vast range of loan products, including fixed-rate, variable-rate, and interest-only loans. Brokers can compare the features and rates of different lenders and products and match you with the most suitable option for your financial situation and requirements. This access to a wide range of lenders and products means that brokers can often find loans that are not available to the general public.

Time and effort-saving

Applying for a mortgage can be a time-consuming process, with many forms to fill out and documents to provide. A mortgage broker can save you time and effort by handling the paperwork and liaising with lenders on your behalf. Brokers can also provide pre-approvals, which can speed up the purchasing process and give you more negotiating power when making an offer on a property.

Expert advice

Mortgage brokers are experts in the lending industry and can provide you with tailored advice on the best loan product for your needs. They can explain the features and benefits of different loan products and help you understand the terms and conditions of the loan. A broker can also offer advice on the best way to structure your loan to suit your financial goals, such as reducing interest payments or paying off the loan faster.


Many people assume that using a mortgage broker is more expensive than going directly to a lender. However, in many cases, brokers can secure a better interest rate and loan terms than a borrower could negotiate on their own. Additionally, many brokers do not charge their clients for their services, as they receive a commission from the lender.

Better chance of approval

Lenders have strict criteria for approving mortgages, and each lender’s requirements can vary. A mortgage broker can assess your financial situation and match you with the lender most likely to approve your loan application. Brokers can also help you improve your chances of approval by ensuring that your loan application is complete and accurate and that you meet all the lender’s requirements.

Ongoing support

Mortgage brokers don’t just help you obtain a mortgage; they can also provide ongoing support throughout the life of the loan. They can help you with refinancing, switching lenders, or restructuring your loan to suit your changing financial circumstances. A broker can also provide advice on how to make the most of your mortgage, such as making extra repayments to reduce your interest payments or accessing the equity in your property.

In conclusion, using a mortgage broker in Australia can provide many benefits, including access to a wide range of lenders and products, time and effort-saving, expert advice, cost-effectiveness, a better chance of approval, and ongoing support. If you’re in the market for a mortgage, consider speaking to a mortgage broker to help you navigate the complex lending landscape and find the best loan product for your needs.

How a Mortgage Broker Works

#1. Assessment of the borrower’s financial situation:

When a borrower approaches a mortgage broker, the broker will typically start by assessing the borrower’s financial situation. This may involve reviewing the borrower’s income, expenses, debts, credit score, and other financial factors to get a sense of their overall financial health. The broker will also likely ask the borrower about their goals for homeownership, such as the type of property they want to buy, the desired loan amount, and the preferred repayment period.

#2. The suggestion of suitable mortgage products:

Based on the borrower’s financial situation and goals, the mortgage broker will then suggest suitable mortgage products. Mortgage brokers have access to a range of mortgage products from multiple lenders, including banks, credit unions, and other financial institutions. They will typically consider factors such as interest rates, fees, loan features, and repayment terms when recommending a mortgage product to the borrower. The broker will explain the pros and cons of each option, and help the borrower choose the product that best suits their needs.

#3. Assistance with completing the application process:

Once the borrower has chosen a mortgage product, the broker will assist with the application process. This may involve helping the borrower gather and organize the necessary documentation, such as pay slips, tax returns, bank statements, and proof of identity. The broker will also help the borrower fill out the application forms and ensure that all the information is accurate and complete. They will then submit the application to the lender on the borrower’s behalf.

#4. Communication with the lender on the borrower’s behalf:

Throughout the mortgage application process, the broker will communicate with the lender on the borrower’s behalf. This includes following up with the lender to ensure that the application is being processed promptly and providing any additional information or documentation that the lender may require. The broker will also negotiate with the lender on behalf of the borrower to ensure that they get the best possible deal on their mortgage.

Overall, a mortgage broker can be a valuable resource for borrowers in Australia who are looking to buy a home or refinance their existing mortgage. By providing personalized financial advice, suggesting suitable mortgage products, and guiding the borrower through the application process, a mortgage broker can help make the home-buying process smoother and more successful.

Licensing and Accreditation

Requirements for a Mortgage Broker to Operate in Australia

In Australia, mortgage brokers must meet certain requirements before they can legally operate. These requirements include:

  1. Holding an Australian Credit License (ACL) or being a representative of an organisation holding an ACL. An ACL is issued by the Australian Securities and Investments Commission (ASIC). An ACL is required for anyone who provides credit services in Australia, including mortgage broking.
  2. Completing a Certificate IV in Finance and Mortgage Broking. This qualification ensures that brokers have the necessary knowledge and skills to provide advice on home loans and other types of finance.
  3. Meeting the Fit and Proper Person test. This test assesses the broker’s honesty, integrity, and competence.
  4. Maintaining professional indemnity insurance. This insurance protects the broker and their clients against financial loss due to professional negligence or errors.
  5. Complying with the National Consumer Credit Protection Act (NCCP) and other relevant legislation. This includes providing clients with a Credit Guide and a Credit Proposal Disclosure Document, which outlines the broker’s fees, commissions, and any potential conflicts of interest.

Importance of Using a Licensed and Accredited Mortgage Broker:

Using a licensed and accredited mortgage broker can provide several benefits, including:

  1. Access to a wide range of lenders and loan products: A mortgage broker can compare loans from multiple lenders and help you find the one that best suits your needs and financial situation.
  2. Expert advice and guidance: A licensed and accredited mortgage broker has the knowledge and experience to guide you through the home loan process and help you make informed decisions.
  3. Compliance with industry standards and regulations: Mortgage brokers must comply with strict regulations and codes of conduct, which are designed to protect consumers and promote ethical behaviour.
  4. Peace of mind: By using a licensed and accredited mortgage broker, you can have confidence that they have met the requirements and are committed to acting in your best interests.
  5. Save time and effort: A mortgage broker can take care of the paperwork and negotiations with lenders, saving you time and effort in the loan application process.

How to Choose a Mortgage Broker

Factors to consider when selecting a broker

  1. Reputation: Look for a broker with a good reputation in the industry, and who has a track record of successfully helping clients secure mortgages.
  2. Expertise: Check if the broker has expertise in the type of loan you require. For instance, if you’re self-employed, look for a broker with experience in finding loans for self-employed individuals.
  3. Fees: Understand how the broker charges for their services. Some brokers may charge upfront fees, while others may receive commissions from the lender. Make sure you understand what you’re paying for and how much it will cost.
  4. Communication: Ensure the broker is responsive and easy to communicate with. You want a broker who will keep you informed throughout the entire process.
  5. Access to lenders: Check if the broker has access to a range of lenders and loan products. Brokers who work with a diverse range of lenders can help you find the best deal.

Researching potential brokers

  1. Ask for referrals: Ask friends and family if they can recommend a good mortgage broker. If you know anyone who has recently secured a mortgage, ask them about their experience.
  2. Check online reviews: Look up the mortgage broker’s reviews on online platforms such as Google or Facebook. Pay attention to comments about their communication, responsiveness, and overall experience.
  3. Check their license: Ensure that the broker is licensed and registered with the Australian Securities and Investments Commission (ASIC). You can check the ASIC’s register of licensed credit providers and brokers to confirm their status.

Questions to ask a mortgage broker before hiring them

  1. What are your qualifications and experience? You want to work with a broker who has the necessary expertise to help you secure the right loan.
  2. How do you charge for your services? Understanding the fees upfront will help you avoid any surprises later on.
  3. Can you provide references from previous clients? Getting feedback from other clients can give you insight into the broker’s communication skills, efficiency, and professionalism.
  4. What lenders and loan products do you have access to? A broker with a diverse range of options can help you find the best deal.
  5. How will you keep me informed throughout the process? Clear communication is key to ensuring a smooth mortgage application process. Make sure you understand how the broker plans to keep you in the loop.

Common Misconceptions About Mortgage Brokers

Addressing common myths and misconceptions about mortgage brokers

  1. Mortgage brokers are too expensive: Many people believe that mortgage brokers charge exorbitant fees, making them too expensive. However, mortgage brokers are typically paid by the lender, not the borrower. This means that borrowers can often use a mortgage broker’s services for free.
  2. Mortgage brokers only recommend loans that offer the highest commissions: This is a common misconception about mortgage brokers. While it is true that some brokers may be motivated by commissions, the vast majority of brokers are highly professional and ethical and put the needs of their clients first. Brokers are required to disclose any commissions they receive from lenders.
  3. Mortgage brokers only work with large banks: Another misconception about mortgage brokers is that they only work with large banks. However, mortgage brokers have relationships with a wide range of lenders, including smaller banks, credit unions, and non-bank lenders. This allows brokers to find the best loan options for their clients, regardless of the lender.
  4. Mortgage brokers add extra steps to the loan process: Some people believe that working with a mortgage broker adds extra steps to the loan process, making it more complicated. However, this is not necessarily the case. A mortgage broker can help streamline the loan process by managing paperwork, communicating with the lender, and guiding the borrower.

Examples of the benefits of using a mortgage broker in Australia

  1. Access to a wider range of loan options: Mortgage brokers have relationships with a wide range of lenders, which means that they can offer their clients access to a wider range of loan options than a borrower could find on their own.
  2. Save time and effort: A mortgage broker can save borrowers time and effort by doing the legwork for them. Brokers can compare loan options, negotiate with lenders, and manage paperwork, all while keeping the borrower informed throughout the process.
  3. Expert advice: Mortgage brokers are experts in the home loan industry, and can provide valuable advice and guidance to borrowers. They can help borrowers understand their loan options, explain complex loan terms and conditions, and provide guidance on which loan is the best fit for their needs.
  4. Potential cost savings: By comparing loan options from multiple lenders, a mortgage broker can help borrowers find the best loan for their needs at a competitive rate. This can result in significant cost savings over the life of the loan.


Using a mortgage broker can provide a multitude of benefits when navigating the complex process of buying a home. From access to a wider range of mortgage options to expert guidance throughout the application process, the advantages of using a mortgage broker are clear.

By working with a broker, homebuyers can save time and potentially even money by securing a more favourable interest rate. Additionally, brokers can provide invaluable assistance with negotiating terms and conditions, ensuring that buyers are fully informed and empowered to make the best decisions for their unique situation.

Overall, for those looking for a successful and stress-free home-buying experience, it is highly encouraged to consider working with a mortgage broker. With their knowledge and expertise, they can help guide buyers through the process, providing peace of mind and ensuring that they can secure the best possible mortgage option for their needs.

Author: Shane

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