I’ll be upfront about something before we get into this. I’m a broker, so you’d expect me to tell you to always use a broker. But I’d rather give you an honest, complete picture of the actual differences, including the situations where going straight to your bank is perfectly reasonable, so you can make the call that’s right for you rather than the one that’s right for my business.
A bank, or any direct lender, only offers its own products. When you walk into a branch or apply online, the person helping you is representing that bank, and every recommendation they make is drawn from that bank’s own range, regardless of whether a better fit exists somewhere else.
A mortgage broker sits between you and the lender market. Instead of representing one bank, a broker compares your situation against a panel of lenders, often 30, 40, or more, and helps structure your application to match the lender whose policies and pricing actually suit your circumstances. Brokers manage the process from the initial conversation through to settlement, and in most cases, you don’t pay them directly, since they’re paid by the lender once your loan settles.
This is the single biggest structural difference between the two, and it’s not a marketing line, it’s Australian law. Since January 2021, mortgage brokers have operated under a legal obligation known as the Best Interests Duty, set out under the National Consumer Credit Protection Act and overseen by ASIC. In practical terms, this means a broker is legally required to recommend the loan that’s in your best interests, not the one that’s easiest to place or pays the highest commission, and if there’s ever a genuine conflict between what’s best for you and what benefits the broker, the law requires your interests to come first.
Bank staff do not operate under this same obligation. They’re bound by general consumer protection law, but there’s no legal requirement for a bank employee to tell you that a different lender, or even a different product within their own bank, might actually suit you better. That’s not a criticism of individual bank staff, many of whom are genuinely trying to help. It’s simply a structural fact about who each person is legally required to prioritise.
This isn’t a small or fringe trend anymore. According to the Mortgage and Finance Association of Australia, mortgage brokers facilitated a record 81.6 percent of all new residential home loans in Australia during the June 2026 quarter, up from 53.9 percent just eight years earlier in June 2018. That puts Australia alongside only the United Kingdom and the Netherlands as one of the few countries globally where brokers arrange more than 80 percent of all home lending.
That kind of structural shift doesn’t happen by accident. It reflects a genuine change in how Australians weigh up their options when a loan is one of the largest financial decisions they’ll make.
Access to a genuinely wider market. A single bank can only show you what’s in its own product range. A broker compares your situation against dozens of lenders, including some non-bank lenders you may not have heard of, but whose policies might suit an unusual income situation, a smaller deposit, or a self employed application far better than a mainstream bank would.
Someone assessing lender competition on your behalf. When a broker submits your application, lenders know they’re competing for your business rather than assuming you’ll simply accept whatever is offered, which can genuinely influence the rate and terms you’re presented with.
Expertise with situations that don’t fit neatly into a standard box. If you’re self employed, have a smaller deposit, are buying an investment property, or your income comes from more than one source, a broker who works across many lenders daily generally has a clearer sense of which lender’s policy will actually work for your specific circumstances, rather than a single bank’s one size fits all criteria.
No cost to you in most cases. Brokers are typically paid a commission by the lender once your loan settles, so in the vast majority of cases you’re not paying a broker fee out of pocket. If a broker does charge a fee, they’re required to disclose this to you upfront in writing.
A single point of contact managing the process. Applications, paperwork, liaising with the lender, chasing up settlement, a broker manages the moving parts so you’re not doing it all yourself alongside everything else going on in a property purchase.
I don’t think it’s honest to pretend brokers are the right answer in every single scenario, so here are the situations where going straight to your bank is a reasonable choice.
You’re a long tenured customer with a straightforward, clean application. If you’re PAYG employed, have a stable income, a standard deposit, and an uncomplicated financial position, your existing bank might already offer a genuinely competitive deal, particularly if you’ve built a relationship with them over time.
You’ve already done the comparison work yourself. If you’ve properly compared rates and features across several lenders on your own and you’re confident in what you’ve found, going direct can save a step, provided you’re certain you’ve actually seen the full picture rather than just the headline rate.
Your situation is simple and stands alone. A straightforward refinance with no complicating factors, for a borrower who’s confident navigating the paperwork themselves, doesn’t always need the same level of coordination a broker provides for a more complex situation.
Even in these cases, it’s worth at least checking what a broker comparison would surface before committing, since it costs nothing to find out, but I want to be upfront that there genuinely are borrowers for whom the direct path works out fine.
If you do decide to use a broker, a few things are worth confirming before you commit to working with them.
Check they hold a valid Australian Credit Licence, or operate as an authorised credit representative under one, which you can verify on the ASIC Connect register.
Ask how they’re paid, including whether commission varies between lenders, since this is exactly the kind of disclosure the Best Interests Duty requires them to be upfront about.
Confirm they’re a member of a recognised industry body, such as the MFAA or FBAA, which adds an additional layer of professional accountability and access to external dispute resolution if something ever goes wrong.
For most borrowers, particularly anyone with a situation that isn’t perfectly straightforward, a self employed income, a smaller deposit, an investment purchase, or simply wanting to see more of the market before committing, a broker genuinely adds value that’s hard to replicate by walking into a single branch. For a smaller group of borrowers with a simple, clean application and an existing relationship with a competitive lender, going direct can still work out fine. The honest answer is that it depends on your situation, and that’s exactly the kind of conversation worth having before you commit to either path.
FAQs
In most cases, no. Brokers are typically paid by the lender at settlement, not by you, so you're generally not paying extra for the service, and research has shown broker arranged loans carry interest rates comparable to those arranged directly with a bank.
No single broker has access to every lender, since each broker works through their own panel, though most panels include a broad mix of major banks, smaller banks, and non-bank lenders. It's worth asking how many lenders a broker's panel includes.
No. Bank staff represent their own institution and aren't required to compare their products against the wider market on your behalf. A broker, under the Best Interests Duty, is required to consider this properly.
Often, yes. A decline from one lender doesn't mean every lender will assess you the same way, and a broker who understands different lenders' policies can sometimes identify a better fit for your specific situation.
Yes. A broker's obligations don't replace your own responsibility to understand what you're signing. A good broker will walk you through the details clearly, but it's still worth reading the fine print yourself.
Brokers are required to be members of the Australian Financial Complaints Authority, which provides a free, independent process for resolving disputes if something goes wrong.
If you’re weighing up which path suits your situation, I’m always happy to have that honest conversation, even if the answer sometimes points you elsewhere. Take a look at our Home Loans page for more detail on how we work, or if your situation involves a smaller deposit or self employed income, our Low Deposit Home Loans and Self Employed Home Loans pages cover those specifically.
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