A broker sits between you and the lenders, so it helps to know what does a mortgage broker do before you book a meeting. This guide covers the job, the legal duties, the payment model and the questions worth asking. Spotto Finance is a Dandenong-based broking business, and we use ASIC sources for every legal point.
What Does a Mortgage Broker Do From First Chat to Settlement?
A mortgage broker compares home loans, recommends one that fits your situation and manages the application. The work does not stop when the loan is approved.
- Reviews your income, expenses, savings and goals to estimate your borrowing power.
- Compares loan features, rates and fees across the lenders on the broker's panel.
- Lodges the application, collects documents and answers the lender's questions.
- Keeps you updated until settlement and can review the loan again later.
At Spotto Finance the process starts with a free 30 to 45 minute consultation. The team then compares lenders within 48 hours.
How Do Mortgage Brokers Work With Lenders and Aggregators?
Understanding how mortgage brokers work explains who pays them. Most brokers deal with lenders through an aggregator, a company that holds the lender accreditations.
- A mortgage broker Australia wide must either hold an Australian credit licence or act as a credit representative of a licensee.
- The aggregator passes lender commissions on to the broker business.
- A broker can only recommend from the lenders it is accredited with.
- ASIC expects the panel to be broad enough to serve your best interests.
Ask any broker which lenders it can access and whether your preferred lender is on that panel.
What Is the Best Interests Duty for Mortgage Brokers?
Since 1 January 2021, the National Consumer Credit Protection Act 2009 requires brokers to act in your best interests when giving credit assistance. ASIC explains how in Regulatory Guide 273.
- If your interests conflict with the broker's, your interests must come first.
- ASIC says there is no safe harbour, so brokers must take every step needed.
- A notice or disclaimer you sign cannot avoid the duty.
- The duty covers credit for personal, household and residential investment purposes.
ASIC's October 2026 review noted that over 80% of home loans now go through brokers. It also found that seven of eight aggregator groups reported brokers did not recommend the cheapest loan in more than 20% of cases. A higher-cost loan can be justified, but your broker should explain why.
How Do Mortgage Brokers Get Paid?
Lenders normally pay the broker, not you. The payment is a percentage of the loan amount and usually has an upfront part and an ongoing part.
| Payment type | Who pays | When | Ask your broker |
|---|---|---|---|
| Upfront commission | Lender | After the loan settles | How much, and on what loan amount |
| Trail commission | Lender | While the loan stays open | Is it paid on my balance each year |
| Volume or campaign bonus | Lender | Set by the lender | Does it affect which loan you recommend |
| Direct fee | You | Only if quoted and signed | What does it cover in writing |
ASIC's March 2017 review of broker remuneration (Report 516) found that broker businesses received 0.54% upfront and 0.14% trail on average. Those figures are dated and rates differ by lender, so ask for your own numbers.
What Is Mortgage Broker Commission and How Is It Disclosed?
Commission can create a conflict of interest, which is why brokers must disclose it. ASIC's disclosure information sheet lists the documents a broker must give you.
| Document | When you get it | What it shows |
|---|---|---|
| Credit guide | Generally before any credit work starts | Who the broker is and how they are paid |
| Quote | Before assistance, if you are charged a fee | Estimated cost of the broker's services |
| Proposal document | When credit assistance is provided | Costs, including indirect remuneration |
You can also ask for a free written assessment within seven years. Read the credit guide before you share bank statements.
Do Mortgage Brokers Charge Fees?
Many do not charge borrowers directly, but you must ask. Some brokers charge a fee on top of commission, and it must be quoted and signed first.
- Spotto Finance charges no upfront, application or ongoing service fees.
- Lenders pay Spotto Finance only after your loan settles.
- Mortgage broker fees are separate from lender costs such as valuation and application fees.
- Lenders mortgage insurance may apply if your deposit is under 20%, and break costs may apply to fixed loans.
How Does Using a Mortgage Broker vs Bank Compare?
A bank lender can only recommend its own products. A broker compares across lenders, though only those on its panel.
- Bank staff are paid by their employer and show one lender's range.
- A broker can compare major banks, regional lenders and specialists in one conversation.
- Both must follow responsible lending rules.
- A broker still needs your documents, so the paperwork does not disappear.
Spotto Finance's refinance service includes honest advice when switching is not worth the break costs.
Are Mortgage Brokers Worth It for Every Borrower?
They often help, but the answer depends on your situation. The value is greatest when your loan or income is not straightforward.
- Worth considering for first home buyers, refinancers, investors and self-employed borrowers, all covered in Spotto Finance's loan solutions.
- Less valuable if you already know the exact loan and lender you want.
- Check the recommended loan against two alternatives before you sign.
- Ask why the recommendation suits you better than a cheaper option.
How Does Spotto Finance Work With Borrowers in Practice?
In practice, our clients start with one conversation. Naveen runs the Dandenong office at 5/50 Thomas Street, so you can meet in person, by phone or by video.
- Free first consultation with no obligation.
- Comparison across 30+ lenders presented within 48 hours of the consultation.
- Approval typically takes 5 to 10 business days once the application is lodged.
- One named broker handles your file from first call to settlement.
If you want a mortgage broker Melbourne families can meet locally, see why clients choose Spotto Finance. One client review on our Melbourne page describes a refinance that settled within 45 days, though results vary by circumstance.
How to Choose a Mortgage Broker You Can Trust?
Start by checking credentials, because the best mortgage broker for you explains every cost and does not simply quote the lowest rate.
- Search ASIC's Professional Registers for the broker's credit licence or credit representative number.
- Ask how the broker is paid and request the credit guide.
- Ask which lenders the broker can access and how many loans it considered.
- Ask for the reason behind the recommendation in writing.
This article provides general information only and is not financial advice. It does not consider your personal objectives, financial situation or needs. Rates, fees and rules change, so confirm current details with ASIC and consult a qualified mortgage broker or financial adviser before making lending decisions. Spotto Finance holds an Australian Credit Licence.
Frequently asked questions
Can I get a home loan without a mortgage broker?
Yes. You can apply directly to a bank or other lender. A broker adds a comparison across several lenders and handles the paperwork, but you remain free to apply direct and compare the offer you receive.
Is the best interests duty a legal requirement for every broker?
Yes. Part 3-5A of the National Consumer Credit Protection Act 2009 requires brokers to act in your best interests when giving credit assistance. ASIC's Regulatory Guide 273 explains how it expects brokers to meet that duty.
Can a broker earn more by recommending certain lenders?
It is possible. Lenders can pay volume bonuses or campaign commissions on top of standard commission. Brokers must still put your interests first, so ask how the recommended lender pays and why it suits you.
How do I check that a broker is licensed?
Search ASIC's Professional Registers for the broker's name. A broker must either hold an Australian credit licence or be a credit representative of a licensee. Spotto Finance operates under an Australian Credit Licence.
Do I pay Spotto Finance anything to use its service?
Spotto Finance charges no upfront, application or ongoing service fees, and lenders pay Spotto Finance only after your loan settles. You should still budget for lender fees, valuation costs and lenders mortgage insurance where they apply.
How long does a home loan take through a broker?
Spotto Finance usually compares lenders within 48 hours of your consultation. Approval typically takes 5 to 10 business days after the application is lodged, though timing depends on the lender and how quickly you supply documents.
Can a broker help if I am self-employed?
Often, subject to lender criteria. Some lenders assess business cash flow differently, so a broker looks for those lenders and helps you present your financials. Low doc options may use BAS statements and an accountant declaration.