Need help to narrow down a your home loan options? Speak to a licensed mortgage broker.
A mortgage broker is a professional who helps borrowers find home loans by sorting through the hundreds of loans available in the market today. They're usually free to you as they earn a commission from the lender you choose to go with, and they are able to help you find a loan even if you have some special circumstances, including if you are self-employed, credit impaired or receiving an income from the government in the form of a pension.
Read on for a comparison of mortgage brokers and an explanation on how they work.
How to compare mortgage brokers on finder.com.au
- The table below shows some mortgage brokers you may want to enquire with.
- Click 'Enquire' to read a review about a broker and fill in the form to lodge an enquiry
- You should receive a call back within a business day.
- Enquiries are obligation-free and won't be recorded on your credit file
What is a mortgage broker?
A mortgage broker is a professional who compares and helps you apply for home loans on your behalf. A good mortgage broker will give you personalised service all the way through to settlement.
Many brokers are happy to work around your schedule, and will organise meetings after hours in your home. Plus most mortgage brokers will not charge you for their services — they are paid by the lender. While a mortgage broker does not work directly for banks or financial institutions, they do work with them to provide you with a wide selection of choices.
Brokers can also be tremendously helpful if you have a poor credit history, because while your options may be limited when you approach a single lender, the choices wide array of choices offered by a mortgage broker can help you find a solution.
Back to topWhat do mortgage brokers charge?
The majority of brokers don't charge for their service. Brokers are paid a commission by the lenders they work with for introducing clients. This doesn't mean, however, that the interest rates offered by brokers are higher than those offered directly by lenders. Often brokers are able to get lower rates for their clients. Banks generally see the value in paying commission to brokers because they introduce more customers than a bank's own branch network, and they handle the ongoing customer service after the loan is settled.
Some brokers do charge a fee for their services, but these brokers generally offer services above and beyond sourcing home loans. A mortgage broker who charges a fee might also put together a budget for you, help you identify areas in which to buy and might also be a licensed financial planner who can offer investment advice and build an ongoing strategy for your finances.
How do I choose the right broker?
Mortgage brokers are experts in the home loan and finance fields, so in your comparisons of mortgage brokers you want to make sure you are working with the most informed and experienced broker, and one who has all of the necessary licenses and qualifications. When you are comparing mortgage brokers make sure to look for:
Are they registered with ASIC?
Not only are mortgage brokers required to register with the Australian Securities Investments Commission to operate in Australia (ASIC), ASIC also enforces a required level of experience and education, and require that mortgage brokers undergo continued training.
Members must adhere to a code of practice, ethical behaviour, professionalism, transparency and full disclosure. In order to operate as a broker, a finance professional must either hold an Australian Credit Licence (ACL) or be an Authorised Credit Representative. You can search a broker's qualifications on ASIC's register. If a mortgage broker isn't registered with ASIC, don't use them.
Do they have a broker membership?
ASIC requires that brokers belong to a professional association. You can look for a broker who is a member of the Mortgage and Finance of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA) as this shows a dedication to their work and a transparency in their skills and experience. In order to retain these memberships, mortgage brokers are held to higher standards than is required by law. You can head to the MFAA or FBAA websites to see if your broker is listed.
Are they a member of an external dispute resolution (EDR) scheme?
By law, mortgage brokers must be members of an external dispute resolution (EDR) scheme. An EDR is a private organisation that helps resolve disputes between consumers and service providers. In Australia, mortgage brokers will be members of either the Credit and Investments Ombudsman (CIO) or the Financial Ombudsman Service (FOS). Membership in one of these organisations means you'll have an independent agency to take your dispute to should problems arise.
What technology do they currently use?
Your mortgage broker should be using specialised software to enter and assess all of the information you are telling them in your appointment. This will allow the broker to identify a loan which is best for you, and then explain your options, the loan features and costs.
Is their customer service good?
You should expect nothing less of your mortgage broker than you would any other service provider, so take note of how your enquiry is handled, whether you were kept on hold, and the manner and attitude of the broker. Also make sure your broker provides you with the paperwork they say they will, when they said they would, and if they say they will call you, make sure they do, rather than you having to follow them up.
Do they have professional indemnity insurance?
Ensure the mortgage broker you choose is covered by a sufficient and current Professional Indemnity (PI) insurance policy. This will allow you to have assurance that you can claim any losses incurred if your mortgage broker makes a professional error that costs you money.
Finally, in most states in Australia it is a requirement by law that your mortgage broker provide you with a Finance Broking Contract. To help you ensure your broker is doing their job correctly and keeping you informed, you should expect a contract which includes:
- The loan amount you're applying for.
- The term of the loan.
- The maximum repayment you will need to make, including all loan fees.
- The maximum interest rate, including the revert rate if there is a honeymoon period.
- The deadline for finance to be obtained.
- An acknowledgment that your broker's recommendations were drawn from a range of lenders, but not necessarily from all lenders who offer the type of lending required.
- The name and address of the mortgage broker.
- The mortgage broker's Australian Company Number (ACN).
- The name and address of principals, if the broker is trading under a business name.
- A statement of financial or other benefits which will be received from a source other than yourself.
- A disclosure of whether the broker can recommend or determine loan conditions, and the effect of these conditions.
- Any financial benefits payable to third parties.
- Details of interests or relationships which could influence your broker's recommendation.
How can I make the most of my mortgage broker experience?
Ask for recommendations
Friends, family and colleagues can be great sources of recommendations. Many of the best brokers source the majority of their business from referrals. Ask around and see if anyone you know has had some experience with a good mortgage broker.
Research and compare
Mortgage brokers may have access to hundreds of different loan products, but it doesn't hurt to spend a little time researching your options on your own as well. Remember, this is your mortgage and it will be with you for a couple of decades to come. Arming yourself with information will help both you and your broker.
Special deals might mean special conditions
If a mortgage broker recommends a special deal, always ask if there are any special conditions attached. For example, a super-cheap interest rate with one particular lender might be unbeatable in terms of rate, but the conditions could include penalty fees for extra repayments. Other special deals may include introductory offers that sound incredible, but which revert to a much higher interest rate once the introductory period is over. Always check if there are conditions attached to any special deals you're offered.
Keep notes
Start a folder and keep written notes of any contact you receive. Include details such as time, date, names and any offers you receive in writing from brokers. This can be invaluable later in case of a dispute.
Approach more than one broker
Always keep in mind that different mortgage brokers will often have different lenders on their list to recommend to you. This is because each broker must gain accreditations with each individual lender in order to offer you that bank's products. For this reason, not all brokers will have access to absolutely every lender available in the entire country. They may choose a selection of preferred lenders and banks that represent a broad cross-section of clients well and stick with those. If you consider that not every broker may end up with access to every lender available, it could be a wise decision to make an appointment to talk with two or three different brokers. This may give you access to a wider selection of banks and lenders than you might otherwise have had.
Back to topWhat are some questions I should ask my mortgage broker?
Many people will use a mortgage broker to help them get the right loan or narrow down their choices. However, you should know what you are looking for in a mortgage broker. By knowing what you would like or even what questions you should ask then you can be sure that you have done all that you can to ensure that you get the best broker, and therefore loan, for you.
How much experience do you have?
When you are considering a mortgage broker, you must be sure to look at how much experience they have in the market. While experience isn't everything, you don't want to be victim of a rookie error on the part of a green mortgage broker. Experience also increases a broker's product knowledge and ability to pull strings behind the scenes.
What fees do you charge?
When you're a considering a mortgage broker you must be sure to know exactly what they will charge you. Members of the MFAA will be required to disclose this information. While a handful of brokers charge upfront fees, many will make money purely from the commission that they get from the loan provider.
How do you decide which loan suits me?
It can be highly illuminating for you to find out just how your mortgage broker can help you and their process for doing so. If they aren't thorough in their explanation, you've got a good idea of what the whole experience will be like. If they are however, the signs are looking good.
How many lenders do you deal with?
You really don't want to deal with a broker who only deals with two or three lenders. Look for one with a broad range to choose from.
How do you get paid?
Don't be afraid to ask your broker how much commission they'll earn for recommending a particular bank. By law, they're required to disclose this information. Be sure they're not just recommending the one that will pay them the most.
How do you identify the right mortgage solution for me?
Any good mortgage broker should have a standard method for working out the best possible mortgage solutions for each individual client's needs.
What is the actual cost of the loan (including loan amount and ongoing costs)?
The interest rate you're quoted isn't the only cost that you may incur with your mortgage. Always check if there is an application fee, settlement fee, documentation fee, valuation fee, or any monthly account fees that may be charged. You may also want to check if there are any penalties for making additional payments off your mortgage, or any exit fees that could apply if you repay your mortgage early.
In the 1980s the Australian finance industry was deregulated, which allowed for much healthier competition between lenders on interest rates, fees and home loan features. However, with such competition and choice, Australians soon realised they couldn't compare these loans on their own and so the mortgage brokering industry developed and grew.
Today, 53.7% of all home loans are organised through mortgage brokers or mortgage managers according to a March 2016 release from the MFAA. This force is pushing the bounds of competitiveness of home loans that are now being offered to Australian property buyers.
So what is the difference between a mortgage broker and a mortgage manager? Following are the three main players in the Australian finance industry you need to know about:
Traditional lenders
A traditional lender is a bank, credit union or building society, and these groups are known as Authorised Deposit-Taking Institutions (ADI) as they use their own funds from savings and investment deposits, to fund their home loan products. You can apply for a loan directly from the lender, or through a mortgage broker. Once your loan is approved and settled, the lender administers your loan for the entire term.
Non-traditional lenders
Also known as non-bank lenders, these lenders obtain their funds from investors, financiers or trust funds, and are often considered 'credit providers' and not 'deposit takers' as many of them don't have the APRA accreditation to do so. Non-traditional lenders may package their loans to be distributed by a mortgage manager or a mortgage broker. A non-traditional lender can often be more flexible in their lending criteria and can be cheaper at times.
Mortgage managers
Also acting as an intermediary between you and a lender, a mortgage manager will actually provide, administer and manage your home loan from the time of application, throughout the life of your loan. A mortgage manager is paid through the loan application fees, but your repayments are made directly to your lender.
I'm ready to find a mortgage broker
Click on your state or territory in the map below to find your local broker.
Which banks provide halal home loan?
In some country HSBC and citi bank has halal loan. Do they have halal home loan in Australia?
Hi Mohammad,
Thank you for contacting finder.com.au we are a financial comparison website and general information service.
There are lenders that will offer sharia-compliant home loans but these are specific specialist lenders, which we outline on our page regarding Islamic Home Loans here.
Regards
Jodie
Does A broker have to tell you if they plan to sell your loan in the future.
Can they do so without giving you a chance to refinance with a company(bank) of our own choice.
Hi Sandy,
Thank you for contacting finder.com.au we are a financial comparison website and general information service and therefore can only offer general advice and information.
A mortgage broker does not actually hold your loan once the loan documents have been signed the loan is held by the lender. Broker may sell their client book onto another broker however this only affects any residual commission that may be being earnt by the broker on the loan they assisted you in getting but won’t affect your actual loan.
If you have any concerns please speak to your broker or lender direct or seek the advice of a financial advisor.
Regards,
Jennifer
Hi, I’m planning to buy my first house that worth $520,000. I’m able to pay 20% deposit. I don’t have any debt or credit card debt. However, I’m earning $37,000 p.a. permanent part time. how do I take out the 80% of the home loan. Thanks
Hi Emily,
Thank you for your inquiry.
Generally, your approval for an 80% Loan-to-Value Ratio (LVR) would entirely depend on the assessment of the lender of the financial factors concerning your ability to repay, income, assets, debts and credit rating. Your capacity of paying a 20% of the property’s value may be a good indicator that the lender may approve you for a loan, but please keep in mind that all other factors will be accounted for.
If you want to get information on how to calculate your Loan-to-Value Ratio and your high LVR home loan options, please feel free to visit this page. For any professional advice concerning your other home loan options, speaking to a mortgage broker (above) would greatly help.
I hope this has helped.
Cheers,
May
Hi, I am 72 years old, have a full time job and I get finance assistante from centrelink. My question is can I apply for investment home loan ? If yes then who is the mortgage broker or bank I should go. Thanks.
Hi Dp,
thanks for the question.
I’m unable to say whether or not you could apply for an investment home loan as each lender has their own unique lending criteria which they’ll use to evaluate your application. I would recommend either contacting a number of lenders to find out their eligibility criteria or alternatively contacting a mortgage broker and finding out which lenders they think you will be approved with.
I hope this helps,
Marc.
Can I get a loan for building on my land I own. On centrelink and banks are not willing
Hi Sarah,
Thanks for getting in touch.
We have a page about home loans for Centrelink recipients where you can see which benefits are accepted by lenders and you can enquire with a mortgage broker.
You can compare several construction and owner-builder home loans on this page but unfortunately most lenders restrict the loan amount to 60% of the total land value and construction cost. If you don’t have a stable income source or sufficient savings, it may prove difficult to qualify.
Feel free to read our tips about how owner builders can increase their chance of getting approved for a loan.
Thanks,
Belinda
Hi, we currently live in WA but plan to buy our first home in Tasmania – hopefully in the next 6-12 months. Should we be looking at finding a mortgage broker here, or in Tas? Or does it not really matter?
Thanks :)
Hi Jac and Noah,
Thanks for your inquiry.
finder.com.au is an online comparison service so we are not licensed to provide you with specific personal advice regarding where you should consult the services of a mortgage broker.
If you intend to purchase a property in TAS, then I believe you may benefit from using a broker that has expert knowledge of the property market in that location. Additionally, a broker in TAS would be aware of relevant fees and legislation related to your property purchase as these are commonly governed on a state level.
Thanks,
Belinda
First time home buyer:
I would like to apply for a home loan for rural property in SA, no more than 1 hour from Adelaide. What are the required deposit percentage and what is the max acreage I can apply for and be financed?
Thanks.
Hi Daniel,
Thanks for your enquiry.
The required deposit percentage and the amount of land you can finance will depend on the lender or issuing provider of the loan. Generally, lenders will prefer that your property is under 10ha and banks will be conservative in their lending for properties greater than 200ha in size. Ideally, you’ll need a 20% deposit of the property value but again, this will depend on the lender.
On this page you can read more about rural or construction home loans and fill out a form to speak with a specialist from Building Loans Australia about your financing needs.
Kind regards,
Belinda
We own our home and want to make renovations and improvements. Can we get some kind of home loan to do this or do we have to get a personal loan. Thanks, Merle
Hi Merle.
If you’ve owned your home for an extended period of time e.g more than 5-10 or more years, its likely you have equity in the property. I’m assuming you don’t have a redraw facility or if you do the amount available is minimal. I’d suggest a refinance of your home to release the available equity. Hope that helps.
David.
Hi Merle,
Thanks for your enquiry.
Depending on the nature of your renovation, you may want to consider a line of credit loan or a construction loan.
You can find details about these types of loans on this page.
Thanks,
Belinda
can i talk to someone about a rural lone please
Hi Michael,
Thanks for your question.
Please choose one the brokers on our panel that you’d like to speak with.
If you click ‘enquire’ you’ll be taken to a page where you can enter a few of your details, and a loan specialist will get in touch with you.
Cheers,
Shirley
I am up for my 3rd house purchase in victoria, using the same non bank lender and their local rep. Firstly I have to refinance my old loans to make this $800k purchase work and the rep has gone back on his word that I would only be up for only the government, but no bank charges, obviously to try and secure my business. Given the fees are not consistent with the past loans even after factoring typical increases, cpi etc. My concern is how can I check the initial fees and charges are what they should be. Could you tell me how the title transfer, mortgage discharge and mortgage registration fees are calculated. And does every purchaser have to be up for the lender’s legal fees. Also what recourse do I have with all these broken promises.
Note – haven’t signed the application form yet but only 5 weeks till settlement.
Hi Mark,
Thanks for your question.
You can check the initial fees and charges with the lender, or if its government related, with your local Office of State Revenue. Things like title transfers, mortgage discharge and mortgage registration fees are also dependent on the lender, and so every lender has a different way of calculating these fees.
Legal fees are generally included into the cost of buying property to cover the cost of setting up the title of the property, and the contracts being written up. This page may be able to provide you with more information about the costs of buying a property and included a calculator and step-by-step guide.
Cheers,
Shirley