The short version
Most mortgage brokers in Australia are paid by the lender, not the borrower. The lender pays an upfront commission when your loan settles and a smaller ongoing trail commission while the loan is active.
The best interests duty
Since 2021, mortgage brokers have been legally required to act in the best interests of their clients and to prioritise your interests when there's a conflict. Your broker must be able to explain why the recommended loan suits you.
What you should receive
Before you proceed, you should receive a Credit Guide, which explains who the broker is licensed through and how they're paid, and a Credit Quote if any fee applies to you. Read both, and ask questions.
At Lend Secure we'll tell you what we'd be paid by each lender on request, so you can see there's nothing hidden.
Read our full Credit Guide, including commission disclosure, or learn more about Ram.
Does commission affect which loan I'm offered?
It shouldn't, and the law is designed to stop it. The best interests duty requires a broker to recommend a loan because it suits you, and to record why. Commission rates across major lenders are similar, which reduces the incentive to favour one lender. If you're ever unsure, ask your broker to explain why they chose a particular loan over the alternatives.
What about clawbacks?
If you repay or refinance a loan within the first year or two, the lender may claw back some or all of the upfront commission from the broker. That's between the lender and the broker; it isn't charged to you.
Questions worth asking any broker
- Which lenders are on your panel, and which do you use most?
- How much commission will you receive on the loan you're recommending?
- Do you charge any fees, and when?
- Do you pay anyone for referring me?
- What happens after settlement? Will you review my loan?
At Lend Secure we answer all of these in writing. Our licensing details are in the footer of every page, and the full breakdown is in our Credit Guide. You can also read Ram's approach.
Questions? Talk them through with Ram
Free, no-obligation chat with Ram Lakshmanan. No credit check to start.