How Mortgage Brokers Work in Australia (2026)

A mortgage broker is a licensed intermediary who compares home loans from multiple lenders and manages your application from start to settlement. Unlike going directly to a bank, a broker presents options from their lender panel — typically 20–50 or more lenders — and recommends the most suitable product for your situation.

Here is exactly how the process works in Australia.

Step 1: Initial Consultation

The process begins with a fact-finding meeting — either in person, by phone or via video call. The broker collects information about:

• Your income (PAYG, self-employed, rental, other)
• Your expenses and existing debts
• Your deposit amount and source (savings, gift, equity)
• The type of property you want to buy (owner-occupied or investment)
• Your loan preferences (fixed vs variable, offset account, redraw)
• Your credit history

This is not a formal credit assessment — it is information gathering to allow the broker to identify suitable options.

At this meeting, your broker must:

• Disclose that they receive commission from lenders
• Explain who they represent (themselves, an aggregator, or a credit licensee)
• Provide a Credit Guide outlining their obligations and complaint processes

Step 2: Borrowing Capacity and Product Research

After the initial consultation, the broker calculates your borrowing capacity — the maximum loan amount lenders are likely to approve based on your income and expenses.

They then search their lender panel for products that match your needs. The broker will typically shortlist 3–5 suitable loans and present them to you with a comparison showing:

• Interest rate (variable and/or fixed)
• Comparison rate
• Monthly repayment
• Fees (application, annual, discharge)
• Features (offset, redraw, extra repayments)
• LMI requirements (if applicable)

Under the best interests duty, the broker must recommend the loan that is in your best interest — not simply a product that is “not unsuitable.” If a loan with a slightly higher rate has features that benefit your situation, it may still be the right recommendation.

Step 3: Loan Selection and Credit Proposal

Once you select a product, the broker prepares a Credit Proposal Disclosure — a written document that must be provided before or when the credit contract is entered. It includes:

• The recommended loan product and amount
• The reason it was selected
• All fees and commissions the broker will receive
• A comparison with other products considered

You have the right to ask why specific products were recommended and excluded.

Step 4: Document Collection and Application Preparation

Your broker will provide a document checklist. Common requirements include:

The broker prepares the application and submits it to the lender on your behalf.

Step 5: Lender Assessment and Conditional Approval

The lender assesses your application. This typically takes 2–10 business days depending on the lender and complexity of your application. The lender may request additional documents (conditions).

Conditional approval (also called pre-approval) is issued when the lender is satisfied with your application — subject to:

• A satisfactory property valuation
• Final verification of the property to be purchased

Conditional approval generally lasts 60–90 days.

Step 6: Property Valuation

Once you have a signed contract of sale, the lender orders a property valuation. The valuer assesses the property independently. If the valuation comes in below the purchase price, your LVR calculation changes — the broker will advise on options (negotiate with lender, increase deposit, or consider another lender).

Step 7: Formal (Unconditional) Approval

Once the valuation is satisfactory and all conditions are met, the lender issues formal approval. The lender then prepares the loan documents for signing.

Your broker guides you through the loan documents and ensures you understand the terms before signing.

Step 8: Settlement

Settlement is the legal transfer of property ownership. On settlement day:

1. Your solicitor or conveyancer coordinates with the lender and seller’s representatives
2. Funds are transferred (typically via PEXA electronic settlement in most states)
3. Title transfers to your name
4. Your mortgage is registered on the title

Your broker is available to resolve any last-minute issues that arise before or at settlement.

After Settlement — Ongoing Support

A good broker maintains contact after settlement. This includes:

• Annual loan reviews to confirm your rate remains competitive
• Refinancing advice if better options become available
• Assistance with investment loan applications as your property portfolio grows

Brokers receive a trail commission from lenders (typically 0.15–0.25% per annum of the outstanding loan balance) as long as the loan remains active. This creates an ongoing incentive to keep in contact and provide service.

How Long Does the Mortgage Broker Process Take?

Total from first contact to settlement: typically 4–12 weeks for a standard purchase.

Frequently Asked Questions

Is a mortgage broker’s advice free?

Yes — brokers are paid by the lender via commission once your loan settles. You generally pay nothing directly. Some specialist brokers charge a fee for complex scenarios (e.g., non-resident borrowers, SMSF loans, commercial property) — this should be disclosed upfront.

Does using a broker affect my credit score?

A full credit enquiry is recorded when a lender formally assesses your application. A broker submits to only one lender at a time (unlike applying to multiple banks simultaneously), which helps minimise credit enquiries.

Can a broker get me a better rate than going direct?

Brokers often have access to negotiated rates or lender promotions not available to the public. They can also negotiate on your behalf. However, some lenders offer special rates exclusively through their own channels. The comparison and negotiation value a broker adds is real but varies by lender and situation.

What if I’m unhappy with my broker’s recommendation?

You are under no obligation to proceed. If you believe your broker has not acted in your best interest, you can lodge a complaint with AFCA (Australian Financial Complaints Authority) at no cost. ASIC also accepts complaints about licensed credit providers and representatives.

Related Guides

• Mortgage Broker vs Bank — Which Should You Use?
• How Are Mortgage Brokers Paid?
• Mortgage Broker Best Interests Duty
• Questions to Ask Your Mortgage Broker
• Mortgage Brokers Hub

This article provides general information about how mortgage brokers operate in Australia. It is not personal financial or credit advice. For advice tailored to your borrowing situation, speak with a licensed mortgage broker who holds (or is authorised under) an Australian Credit Licence. Find one through MoneySmart.