How much does a mortgage broker cost?

So, you’re on the journey to homeownership and you’ve heard whispers about these magical beings called mortgage brokers. They promise to help you navigate the labyrinth of loans and land you the perfect deal. But wait, before you dive in headfirst, there’s one burning question on your mind: How much do these brokers actually cost?

We’re here to peel back the layers and give you the lowdown on mortgage broker fees.

What does a mortgage broker charge?

Let’s cut to the chase: in most cases, using a mortgage broker won’t cost you a cent out of pocket. Yep, you read that right – zero, zilch, nada. You see, most brokers aren’t charging you directly for their services. Instead, they’re funded by the banks and lenders they team you up with. It’s like having a personal finance matchmaker working behind the scenes, all on the house.

Just to confirm, we don't charge fees to our customers here at Mortgage Hub.

Well if I don't pay, who does?

Brokers earn their keep through commissions from the lenders. When they bring in a customer (that’s you), the banks dish out a little something-something as a thank you. It’s a fixed percentage of the loan amount ranging between 0.5% to 0.7% (0.65% being most common), and it’s paid out once your loan is signed, sealed, and delivered. This is called an Upfront Commission.

A Trail Commission is a second way a mortgage broker gets paid and are ongoing payments made to brokers for the duration of the loan. This is typically 0.1% to 0.35% (0.15% being the average) of the loan balance paid month on month.

Your mortgage is not penalised or charged at a higher rate to compensate for the commissions payable. Again, it's more like a thank you arrangement from the lender who didn't have to pay marketing, wages and spend time working on your application as the broker did instead.

So, how much does a mortgage broker make?

Tricky question to answer as it depends on how the mortgage broker performs. However, seek.com.au seems to think $90,000 a year is the average income a Mortgage Broker makes. This is more of an established brokers income as I can assure you it can be difficult starting out, trying to build a brand, network and gain the knowledge and experience to reach $90,000 a year.

How can I trust a mortgage broker?

In Australia, robust laws are in place to protect you from fraudulent practices in dealings with mortgage brokers. These laws include:

National Consumer Credit Protection Act 2009 (NCCP Act): This legislation mandates that mortgage brokers must hold an Australian Credit License (ACL) to operate lawfully. Brokers are compelled to act in your best interests and ensure that the loans they propose suit your individual circumstances.

Australian Securities and Investments Commission Act 2001 (ASIC Act): Empowering the Australian Securities and Investments Commission (ASIC), this act governs and supervises financial services, including mortgage broking. ASIC oversees broker licensing, ensures adherence to laws, and investigates any misconduct or breaches.

Credit Regulations: Complementing the NCCP Act, these regulations furnish further details and directives on responsible lending practices, disclosure obligations, and other facets of credit-related activities, including those linked to mortgage broking. Brokers are mandated by law to divulge all pertinent information to you, inclusive of their remuneration from banks.

Best Interests Duty: Enacted since January 1, 2021, this duty mandates that mortgage brokers prioritize your interests above their own or those of the lender when offering credit assistance. This guarantees that brokers consistently act in your best interests.

How do I find the best mortgage broker?

Finding a top-notch mortgage broker in Australia is key to navigating the complex world of home loans. Here’s a handy guide to help you in your search:

Do Your Research: Start by educating yourself about mortgage basics. Understanding the fundamentals will empower you to ask informed questions and better comprehend the advice you receive from brokers.
Seek Recommendations: Tap into your network. Ask friends, family, or colleagues who have recently purchased homes if they can recommend a trustworthy broker. Personal referrals can often lead you to brokers with a solid track record.
Check Credentials: Ensure that any broker you consider holds a valid Australian Credit License (ACL). You can verify this on the Australian Securities and Investments Commission (ASIC) website. A licensed broker is a reliable indicator of professionalism and adherence to regulations.
Read Reviews: Dive into online reviews and testimonials about brokers’ services. While it’s wise to take individual reviews with a grain of salt, collectively, they can provide valuable insights into a broker’s reputation and performance.
Interview Multiple Brokers: Don’t settle for the first broker you come across. Consult with multiple brokers to compare their advice, recommendations, and overall approach. This will give you a broader perspective and help you identify the right fit for your needs.
Understand Commission Structures: Ask brokers about their commission structures and how they are compensated. Be wary of brokers who seem overly pushy or who refuse to disclose details about their remuneration. Transparency is key.
Seek a Second Opinion: If you feel unsure about a broker’s advice or recommendations, don’t hesitate to seek a second opinion. Consulting with multiple brokers can help you gain clarity and confidence in your decision-making process.
Review Loan Terms: Take the time to thoroughly review the terms of any loan proposals presented to you by brokers. Pay close attention to interest rates, fees, repayment schedules, and any potential risks associated with the loan.
Request a Loan Comparison: Ask brokers to provide you with a detailed comparison of the loan options they recommend. This will allow you to evaluate the terms and choose the loan that best aligns with your financial goals and circumstances.

By following these steps and conducting thorough due diligence, you can increase your chances of finding a reputable and reliable mortgage broker who will guide you through the home loan process with expertise and integrity.

Meet Aron Cardona

Your Local Northern Beaches Mortgage Broker

I'm a Mortgage Broker and Northern Beaches local with a passion to help everyday Australians navigate through the complexity of a mortgage to buy property.

I'm a proud father, loving husband and possessed fisherman. If I'm not with hanging with the family or fishing, I'm tucked away in the office working hard for you.

I specialise in tailoring home loan solutions fitting your needs and goals, drawing on my 14 years lending experience, as well as my own personal journey as a first-time buyer, upgrader, investor, and business owner.

I'm accredited with over 40 lenders, being a premium broker with many. I'm also partnered with other local business to help support your financial journey.

I assists clients across Australia, with a focus on the Northern Beaches suburbs of Dee Why, Frenchs Forest, Cromer, Collaroy, Narrabeen, Wheeler Heights, Allambie Heights, Beacon Hill, and Manly.

Book a Meeting with Aron

Cost and obligation FREE online appointments.

Award Winning

MortgageHub is a family operated award winning mortgage brokerage based in Sydney's Northern Beaches, specialising in coaching everyday Australians achieve their financial dreams.

Partnered with over 40 banks and lenders, insurance providers and property researchers, MortgageHub offers a wide range of options and solutions.

We negotiate between all the various banks on your behalf to obtain tailoring a loan solution to benefit your lifestyle and goals.

We'll manage the application process and liaise with real estate agents, banks, solicitors providing you with a stress free service. We offer a helping hand through the entire process so you never feel lost.

Whether your buying a house, car or just need some financial breathing space, we've got your needs covered.