What does a mortgage broker do? A first-timer's guide
By Nathan Ellis · Updated 2026-07-02
A mortgage broker is a licensed go-between who compares home loans from a panel of lenders, recommends a loan that must be in your best interests, and manages the application through to settlement. Moneysmart describes a broker as a go-between who deals with banks and other lenders to arrange a home loan. Lenders usually pay the broker a commission, so most borrowers pay no direct fee.
Most home buyers now use one. Brokers facilitated 81.6% of new residential home loans in the June 2026 quarter, according to Cotality data commissioned by the Mortgage and Finance Association of Australia (MFAA).
What does a mortgage broker do in Australia?
A mortgage broker does 5 jobs for you:
- Works out your situation. The broker must make reasonable inquiries about your requirements, objectives and financial situation, and take reasonable steps to verify your finances (ASIC RG 209). That is why they ask for payslips and bank statements, and it is how they work out your borrowing capacity.
- Compares lenders. The broker compares loans from the lenders on their lender’s panel, which can include banks and non-bank lenders. A panel does not cover every lender, so ask which lenders the broker cannot access.
- Recommends a loan in your best interests. A mortgage broker must act in your best interests and put your interests first where they conflict with the broker’s (National Consumer Credit Protection Act, sections 158LA and 158LB). The duty has applied since 1 January 2021, and it exists because commission is a conflict of interest.
- Handles the application. Moneysmart says a broker helps you apply for the loan and manages the process through to settlement.
- Explains and structures the loan. The broker explains how each loan works and what it costs, including the interest rate, features and fees. The broker can also suggest a structure, such as an offset account or a split between fixed and variable.
A broker can also ask a lender for a sharper rate, though only the lender can quote the final price after assessing your application (ACCC). Doing the comparison and the paperwork for you is where most of the time saving comes from.
A broker must also hold an Australian credit licence or be a credit representative of a licensee. Our guide shows how to check a broker’s credit licence in 5 steps.
What a mortgage broker must give you
A mortgage broker must give you up to 4 documents under the National Consumer Credit Protection Act. ASIC’s information sheet on disclosure sets them out (ASIC INFO 146):
| Document | When you get it | What it tells you |
|---|---|---|
| Credit guide | Generally before the broker starts work for you | Their licence number, fees and commissions that may be payable, the 6 lenders they do the most business with, and how to complain, including AFCA |
| Quote | Only if the broker charges you a fee, before they help you | The maximum you will pay the broker. You must sign and date it first |
| Proposal document | When the broker recommends a loan | The fees you pay on the loan and a reasonable estimate of the commission the broker will receive |
| Preliminary assessment | Free on request | The broker’s assessment that the loan is not unsuitable for you |
If you ask for the preliminary assessment within 2 years of the quote, the broker must give it to you within 7 business days.
How a mortgage broker is paid
A mortgage broker is usually paid by the lender, not by you. Moneysmart says lenders generally pay brokers a commission as a percentage of the loan amount, with an upfront commission and an ongoing trail commission. The MFAA says the commission goes to the broking business, which uses it to cover costs such as aggregator fees before the broker is paid. A broker can also charge you a fee directly, but only after you sign a written quote. Our guide to how mortgage brokers get paid sets out the typical commission rates.
First time using a mortgage broker: 6 steps
Using a mortgage broker for the first time follows the same 6 steps whichever broker you choose, from the first meeting to settlement.
Step 1: the first meeting
The first meeting is a fact-find. The broker asks about your income, expenses, debts, savings and what you are trying to do, such as buying a first home, refinancing or investing. Moneysmart suggests going in with a list of your must-haves and nice-to-haves in a home loan, such as an offset account or the ability to make extra repayments.
Step 2: a shortlist of loans
The broker compares lenders on their panel against your situation and comes back with options. Moneysmart says the broker should present more than one option and explain how each loan works, what it costs and why it is in your best interests. You do not have to take the first loan you are offered.
Step 3: documents and the application
Once you choose a loan, the broker prepares and lodges the application. This is the paperwork-heavy stage. For a home loan, the inquiries and verification behind the broker’s assessment must be done within 120 days before the assessment, so recent documents matter (ASIC RG 209).
Step 4: conditional approval
The lender assesses the application your mortgage broker lodged and may issue conditional approval. The lender is willing to lend, subject to conditions such as a satisfactory property valuation.
Step 5: valuation and unconditional approval
The lender values the property, and your mortgage broker passes on anything the lender still needs. If the valuation supports the loan, the loan moves to unconditional approval, and the lender prepares the loan documents for you to sign.
Step 6: settlement
Your mortgage broker, your settlement agent and the lender coordinate settlement, when the loan is drawn and the purchase or refinance completes. Many brokers offer to review your loan in later years, but that is a service, not a legal duty, so ask what the broker offers after settlement.
What to bring to your first broker appointment
Bring documents that show your income, spending and debts, because the broker has to verify your financial situation. A typical list:
- Photo ID
- Recent payslips, or tax returns and financial statements if you are self-employed
- Bank statements for your transaction and savings accounts
- Details of debts, such as credit cards, car loans and HECS-HELP
- A rough budget of your regular expenses
- Your list of must-haves and nice-to-haves in a loan
If you are self-employed, see self-employed home loan declined for what lenders look at. First home buyers should also ask the broker about the WA first home buyer grants and schemes they may qualify for.
Finding a mortgage broker in Perth
434 businesses are listed in our Perth mortgage broker directory. Speaking with more than 1 broker before you choose is fine. Membership of the MFAA or FBAA is a supporting signal, not a substitute for the licence check. If something goes wrong, complain to the broker first, then to the Australian Financial Complaints Authority (AFCA), as Moneysmart sets out. Our guide to mortgage broker vs bank covers when going direct to your own bank makes more sense.
Checked against Moneysmart, ASIC, the MFAA and the National Consumer Credit Protection Act on 26 September 2026. This is general information, not financial advice. It does not consider your objectives, financial situation or needs.
Frequently asked questions
What does a mortgage broker do?
A mortgage broker compares home loans from a panel of lenders, recommends a loan that must be in your best interests, and handles the application through to settlement. The broker must also check your financial situation and give you disclosure documents such as a credit guide.
What is a mortgage broker?
A mortgage broker is a go-between who deals with banks and other lenders to arrange a home loan, according to Moneysmart. Since 1 January 2021 a mortgage broker must act in your best interests. In Australia a broker must hold an Australian credit licence or be a credit representative of a licensee.
How do mortgage brokers make their money?
Mortgage brokers usually earn a commission from the lender, paid as a percentage of the loan amount, with an upfront and an ongoing payment. The MFAA says upfront commission is generally 0.65% to 0.70% of the amount drawn, and trail around 0.15% a year. Some brokers also charge a fee, but only after you sign a written quote.
Is it worth paying a mortgage broker?
Most borrowers do not pay a mortgage broker directly, because the lender pays the commission, and brokers facilitated 81.6% of new home loans in the June 2026 quarter. If a broker does charge a fee, Moneysmart suggests checking what other brokers charge for similar services before you sign the quote.
What documents do I need for a mortgage broker?
Bring 6 things: photo ID, recent payslips or tax returns if self-employed, bank statements, details of your debts, a rough budget and your list of loan must-haves. The broker must verify your financial situation before recommending a loan.
Is the first broker meeting a commitment?
No. The first meeting is a fact-find, and you can speak with more than 1 broker before deciding. A broker who charges a fee must give you a written quote to sign before they help you.
Frequently asked questions
- How long does the first meeting with a broker take?
- Usually 45 minutes to an hour, either in person, on a video call, or over the phone. It covers your income, expenses, goals, and what kind of loan you're after, so the broker can start narrowing down lenders.
- What documents should I bring to the first appointment?
- Recent payslips or tax returns, bank statements, ID, and a list of your regular debts and expenses. A broker will usually send a checklist beforehand so you can gather everything before you meet.
- Do I have to commit to a broker at the first meeting?
- No. The first conversation is for both of you to work out if it's a good fit. You're free to speak with more than one broker before deciding who to work with.
- How long from application to approval?
- It varies by lender and how complete your paperwork is, but a straightforward application often gets conditional approval within one to two weeks. Complex situations, like self-employed income, can take longer.