Guide · Broker vs Bank
Broker or bank — the honest answer.
Both options can deliver a good loan. They're answering different questions, charging in different ways, and suited to different borrowers. Here's what each is actually good at — and where each falls down.
Reviewed · Adam King — 30 years in finance, Sunshine Coast
The short version
Your bank has one product set and one set of credit policies — the ones they sell. A broker has 60+ lenders on panel, chooses across them, and is legally required to act in your best interests. A bank ultimately answers to its shareholders and is under no such obligation to you. That's the structural difference.
If your situation is straightforward (PAYG income, clean credit, 20% deposit, simple security), going to a single lender direct can still get you a competitive loan. If anything about your file is non-standard — self-employed, multiple properties, complex structures, lower deposit, recent credit events, or you simply want to know what every lender thinks of you — a broker covers more ground. Both are valid. Knowing which describes you is the point.
Side by side
| Consideration | With us | Direct with a bank |
|---|---|---|
| Works for who? | You. A broker must give you the best option for your circumstances — it's the law (Best Interests Duty) | Profit, not you. A bank has no requirement to act in your best interests |
| Number of lenders | 60+ on panel (major banks, second-tier banks and specialist non-banks) | One — the lender you walked into |
| Cost to you | Nothing — paid by the lender, flat commission structure, same regardless of lender choice | Nothing visible — the rate you're offered reflects what they need to win the deal |
| Legal duty owed | Best Interests Duty — legally required to act in your interests, not the lender's | No best-interests duty — a responsible-lending obligation not to sell you something unsuitable, but no duty to act in your best interests |
| Policy flexibility | Can shop the file — when one lender says no, take it to another with different policy | If their policy says no, the conversation ends |
| Speed for a simple file | Brokers add a layer — typically 1–2 days extra at the front end | Direct can be faster for a clean PAYG file with the right lender |
| Ongoing review | We re-rate every client twice a year — and re-negotiate or move where it pays | Any review is on you to initiate |
How brokers actually get paid
This is the part the bank ads like to highlight, so let's be transparent. A broker is paid by the lender, not by you. There are two parts:
Upfront commission: usually 0.50–0.80% of the loan amount, paid by the lender at settlement.
Trail commission: 0.15–0.20% per year on the outstanding balance, paid monthly while the loan is in place.
Critically, since the Royal Commission reforms, that commission is essentially identical across lenders. There's no lender that pays meaningfully more than another. A broker who steers you to a worse loan to earn a bigger commission is breaking the law and risking their licence. Trail commission rewards a broker for placing loans that stay — i.e. loans the client is happy with.
The Best Interests Duty (effective 1 January 2021) makes this a legal obligation, not a marketing line. A broker who recommends a loan that isn't in your best interest is committing a breach. A banker recommending their own product isn't held to the same standard.
When a broker is the better choice
- You're self-employed or have variable income — different lenders treat business income very differently
- You're refinancing — comparing the panel against your current rate is the whole job
- You're investing — structures, ownership entities and serviceability vary enormously
- You've had a credit hiccup — defaults, late payments, divorce settlements all change the lender shortlist
- You're a first-home buyer wanting to know all your concession options (FHBG, state schemes, LMI waivers)
- You want one point of contact for the life of the loan, not whichever banker rotates through the branch
When the bank direct is fine
- You're a long-standing customer with a clean file and the bank is already pricing competitively
- You're doing a small variation (top-up, splitting fixed/variable) on an existing loan
- You strongly prefer a single banking relationship and are willing to pay a small premium for it
- Your situation is straightforward and you have the time to compare your bank's offer against the market yourself
The middle path
You can always get a broker quote, then call your bank.
There's no commitment in a broker's first conversation. Get a clear view of what the market will offer you, then go back to your existing bank with that number and ask them to match. Sometimes they will. If they do — great, stay. If they don't — the broker's option is on the table. Either way you're better informed than starting with the bank.
What ASIC says
ASIC's MoneySmart guidance is straightforward: mortgage brokers can be a useful source of information and competition. MFAA's Quarterly Market Share releases have put broker-facilitated new residential lending at roughly three-quarters of the market in recent quarters — up from under 50% a decade ago. Check the latest MFAA release for the current figure. The growth reflects a market answer to the question 'who's working harder for me' — and the regulatory framework (the Best Interests Duty in section 158LA of the NCCP, commission transparency, dispute resolution through AFCA) has caught up to support it.
This isn't a sales pitch. There are real cases where the bank route is the cleaner option. The honest answer depends on your file. MFAA market-share reporting is published at mfaa.com.au; ASIC's broker guidance lives on moneysmart.gov.au.
Questions you might have
The honest answers.
Real numbers · honest answers
See what the market *actually* offers you.
Twenty-minute discovery call. No commitment, no fee. Either we beat your bank's offer or you keep your bank with confidence.
Keep reading
General information only — not personal credit advice. Rates and figures shown are indicative and subject to confirmation against current lender pricing and policy.