Broker fees and commission
How mortgage brokers get paid, written down.
On most home loans the lender pays your broker, not you. That is the short answer and it is the one every broker gives. The longer answer is worth having, because it explains what the broker is incentivised to do, when a fee can land on you instead, and what you are entitled to see before you sign anything.
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- The lender pays an upfront commission when your loan settles, and a smaller trailing commission each month it stays open
- Every dollar of it is disclosed to you in writing, in the Credit Proposal, before you apply
- Where we do charge a fee, it is quoted and agreed in writing first, never discovered afterwards
What the lender pays, and when.
Two payments, both from the lender. The upfront commission is paid once, after your loan settles, and is calculated on the amount actually drawn down rather than the amount approved. The trailing commission is a much smaller amount paid monthly for as long as the loan stays with that lender, calculated on the balance still owing, so it shrinks as you pay the loan down and stops entirely when you refinance or sell.
The rates differ by lender, and that difference is exactly why disclosure matters. Before you apply for anything, you receive a Credit Proposal Disclosure Document that states the commission that particular lender will pay us on that particular loan, in dollars. If you want to compare what two lenders pay us before choosing between them, ask; the numbers are yours to see.
There is one more mechanism worth knowing about, because it affects behaviour rather than price: clawback. If a loan is repaid within roughly the first two years, the lender takes back some or all of the upfront commission from the broker. It is the reason a broker has no incentive to put you into a loan you will need to escape from quickly, and it is also the reason a small number of files carry a fee.
When a broker does charge you a fee.
Most residential home loans carry no fee to the client. Some work does, and we would rather say so plainly than run a slogan that is true most of the time.
Complex or time-heavy commercial and development files can carry a broker fee, because the work involved is not proportionate to what a lender pays. Short-term facilities, including some bridging loans, can too. And where a loan is likely to be repaid inside the clawback window, a fee may apply to cover the commission the lender will take back.
In every one of those cases the fee is quoted in writing and agreed before any work starts. You will never find one at settlement that you had not already signed off on. If a broker cannot tell you their fee position before they start work, that is the answer to your question.
Broker or bank: what the money actually buys.
A bank's lender is paid to sell that bank's products, assessed under that bank's policy. That is not a criticism, it is the job description. It does mean the answer you get is bounded by one credit policy and one pricing sheet.
Since 2021 mortgage brokers have owed you a legal Best Interests Duty: an obligation to act in your interests, enforceable, and one your bank's staff do not owe you. Alongside it sits the practical difference, which is leverage. A broker asking a lender for discretionary pricing is asking on behalf of a loan that can credibly go somewhere else. A customer asking their own bank is not.
The comparison across our 35+ lender panel, the negotiation, the application and the six-monthly repricing call after settlement are all covered by the same commission. Which is the honest reason brokers now write most of Australia's home loans.
Why LINK Advance.
Disclosed in dollars, before you apply.
Not a percentage buried in a PDF. The Credit Proposal states what this lender pays us on this loan, and you see it before anything is lodged.
Best Interests Duty, in law.
A legal obligation to act in your interests, in force since 2021, and one a bank's own lending staff do not carry.
262 five-star reviews.
Real clients, real outcomes, unedited on our Google listing and reprinted in full below.
Your broker, not a call centre.
Hugh, Callum and Jacob write every loan themselves: the person who meets you is the person who structures the deal, drives the approval and reprices your rate every six months after settlement. That's why 262 Google reviews name them personally.
Meet the team →262 five-star reviews, and counting.
The reviews page →Verify on Google →Callum and the team were fantastic to deal with every step of the way. As first home buyers we really appreciated Callum's simple explanations of each part of the process and we couldn't be happier with the result.
Seamless experience dealing with Hugh and the Link Advance team to refinance our home. Thank you!
Jacob and the team at LINK Advance made buying our investment property quick and painless. Would recommend
We’ve just bought our first home with the help of Callum and the team at LINK, and we couldn’t be more grateful. Callum went above and beyond, kept us informed every step of the way, and made the whole process feel easy and stress-free. Highly recommend!
Hugh has been amazing throughout the process of buying our new house. He is very approachable and knowledgable and went above and beyond what we expected to help us out. Thanks so much Hugh!
Jacob was an efficient mortgage broker. The process was made simple and constant updates were communicated. Any questions asked were responded to timely. Highly recommend Jacob.
Building a house can be so stressful and overwhelming let alone dealing with the finance aspect of it, however with Callum it has been the exact opposite. He has been so patient and extremely helpful throughout the whole process. Highly recommend!
Hugh Dellit was fantastic to work with and truly understood our needs when it came to applying for our first home loan. I would highly recommend him for his professional, kind and friendly service.
Jacob provided informative and friendly service every step of the way. He was a great comfort to us as first home buyers as we knew we were in good hands. Thanks for all of your help Jacob!
Hugh and the rest of the team were excellent at securing us a home loan. Knowledgeable, friendly, very communicative and made the entire process stress free and easy. We can’t recommend Hugh and the rest of the team at Link Advance enough.
Frequently asked questions.
How do mortgage brokers get paid?
By the lender, in two parts. An upfront commission paid once when your loan settles, calculated on the amount drawn down, and a trailing commission paid monthly on the balance still owing while the loan stays with that lender. Both are disclosed to you in writing, in dollars, before you apply.
Do mortgage brokers charge a fee?
Not on most residential home loans. Some complex commercial and development work does carry a broker fee, and so can short-term facilities such as bridging, because the work is not proportionate to what the lender pays. Any fee is quoted and agreed in writing before work starts.
How much does a mortgage broker cost?
On a standard home loan, nothing from you: the lender pays the commission on settlement. Where a fee does apply it is agreed up front in writing, so the cost is known before you commit rather than discovered later.
What is mortgage broker commission in Australia?
An upfront payment from the lender when the loan settles, plus a monthly trailing payment on the outstanding balance. Rates vary between lenders, which is precisely why the law requires your broker to disclose the actual figures for your loan in the Credit Proposal before you apply.
What is clawback?
If a loan is repaid within roughly two years, the lender reclaims some or all of the upfront commission it paid the broker. It is why brokers have no incentive to place you in a loan you will need to leave quickly, and why a fee occasionally applies where a short hold is expected.
Is a mortgage broker better than going to the bank?
A bank offers its own products under its own credit policy. A broker compares a panel of lenders, including your bank, and negotiates with the leverage of being able to take the loan elsewhere. Brokers also owe you a legal Best Interests Duty; bank staff do not. That is why brokers now write the majority of Australian home loans.
Does using a broker get me a worse rate than going direct?
No. Lender pricing is not marked up to cover broker commission, and discretionary pricing is often easier to obtain through a broker than over the counter, because the request carries a credible alternative behind it.
Your broker for life.
One broker, 35+ lenders, and the numbers on the table.
Most home loan broking is paid by the lender, not you. Tell us what you're planning and a broker will call to map your options. No obligation.
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