What does a mortgage broker do?
A mortgage broker compares loans from a range of lenders, recommends the options that fit your situation, and handles the application for you. Go to a single bank and you see only that bank’s products. A broker can compare across the banks and non-bank lenders they work with, and knows how differently each one assesses income, assets and residency.
That matters most for business owners, the self-employed, and clients with several properties or an SMSF: lenders calculate income and assets very differently, so a borrower declined by lender A may be perfectly fine with lender B.
How do brokers get paid? Do clients pay?
Brokers are usually paid commission by the lender: an upfront commission when the loan settles, plus an ongoing trail commission while the loan is in place. In many cases the client does not pay the broker a separate fee.
Two things to keep in mind:
- Fees and commission arrangements vary between broker businesses, and some charge a service fee on top of commission. Before you start, ask directly: what will I pay, and when?
- Brokers are required to disclose commission and related information to clients, and you are entitled to ask for an explanation.
At New Directions Finance, the assessment stage is free, with no fee if we cannot succeed.
Will a broker just recommend the highest-commission loan?
The law restricts that. Since 2021, Australian mortgage brokers have been subject to a best interests duty: they must put the client’s interests ahead of their own and the lender’s, recommend a loan that suits the client’s needs and finances, and keep records.
The duty is a floor, not a guarantee that every broker is equally good. Useful signs: they ask about your goals and situation before quoting a rate, they explain why they recommend a loan, and they tell you about the risks and costs as well.
A broker has limits too
- A broker’s panel is not the whole market. Some lenders deal only with direct customers or do not work with brokers.
- The lowest rate is not always the best fit. Repayment flexibility, offset accounts, early repayment limits and settlement speed all affect the total cost.
- A broker is not a tax agent or financial adviser. Questions about tax, super and asset allocation still need the right professional.
How can you check that a broker is licensed?
- Check the licence. A broker must hold an Australian Credit Licence (ACL) or be an authorised Credit Representative of a licensee. You can verify this on the official ASIC register. Our licence number is ACL 484837.
- Ask how many lenders they work with, and whether they can explain why they chose this one.
- Ask about fees. Every cost should be explained before you begin.
- See whether they are willing to put the recommendation and reasons in writing.
Want to talk through your situation?
New Directions Finance is a North Ryde-based Sydney broking team with bilingual advisors throughout. Book a free consultation, or start with what we cover.
This article is general information only and not personal financial advice. Commission, fee and regulatory details reflect public information at the time of writing (October 2026) and may change; rely on the latest ASIC and legislative requirements.
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