How do mortgage brokers get paid in Australia?

This is the question every borrower should ask and too few do. The honest answer is simple: the lender pays us, you don't, and you're entitled to see the numbers before you commit to anything. What follows is how the money actually moves, and what the law does to stop it distorting the advice.

Upfront commission

When your loan settles, the lender pays the broker a one-off upfront commission calculated as a percentage of the amount drawn down — net of any offset balance at some lenders. It's paid from the lender's own margin, not added to your loan, and it does not change your rate or your fees. You are not charged more for using a broker than for walking into the branch, and in practice broker-negotiated pricing is frequently better than the advertised rate.

Trail commission

A much smaller commission is then paid monthly for as long as the loan stays with that lender and is conducted properly. Trail exists for a reason worth understanding: it pays the broker to still be there in year four when your fixed rate expires or you want a rate review, rather than being paid once and moving on. It also means we have a direct financial interest in you staying happy with the loan we put you in.

Clawback

If the loan is discharged within a set period — commonly the first one to two years — the lender claws back some or all of the upfront commission from the broker. That's a risk brokers carry, not a cost passed to you, and it's another reason a broker has no incentive to churn you into a loan you'll leave quickly. Some brokers do pass clawback on as a fee in defined circumstances; if that applies, it has to be disclosed in writing before you proceed, so read the document and ask.

What you'll see in writing

Before you commit, you receive a Credit Guide and then a Credit Proposal Disclosure. Together these tell you who we're licensed through, the lenders on our panel, the commission we expect to receive for the loan being recommended, any fees payable by you, and how to complain — including our external dispute resolution scheme. These aren't optional formalities; they're a legal requirement, and they are your evidence trail. If a broker won't show you their commission, that tells you something.

Best Interests Duty

Since 2021, mortgage brokers in Australia have owed a statutory Best Interests Duty to the consumer, and a related obligation to prioritise your interests over our own where they conflict. In plain terms: recommending a loan because it pays more is against the law, not merely against good practice. Brokers must also document why a recommendation suits your circumstances — which is why we put the comparison in front of you rather than just naming a lender. Bank staff, notably, do not owe you this duty.

Why this model works in your favour

Commission rates across mainstream lenders are broadly similar, so there's rarely a material financial reason to prefer one over another — and where there might be, the duty and the disclosure both bite. What you're really buying is access to a panel of lenders, someone who knows which of them will say yes to your particular circumstances, and a person who remains accountable for the recommendation years later. If you'd still rather see the numbers first, ask us for the commission figure on any option we put up. We'll tell you.

The information on this website is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information you should consider whether it is appropriate for you. Terms, conditions, fees, charges and normal lending criteria apply. Rates are subject to change.