Mortgage broker fees and the best interests duty
In most cases you pay a mortgage broker nothing directly: the lender pays the commission, and any fee must be quoted in writing and signed by you before work starts. Since 1 January 2021 the broker has also owed you a statutory duty to act in your best interests, which a bank's own staff do not. This guide covers the fees, the exceptions, what the duty obliges a broker to do on your file, and how to check and enforce it.
- Most brokers charge the borrower nothing; the lender pays commission. Mozo cites ASIC data that about 85% of brokerages charge no upfront fee
- A broker who does charge must give you a written quote you sign before the work, and cannot request a fee otherwise (Moneysmart)
- Fees appear on commercial and business loans, very small loans, complex files, and sometimes loans paid out within two years (Home Loan Experts)
- The best interests duty (National Credit Act Part 3-5A, ASIC RG 273) requires the broker to act in your best interests and to put your interests first in a conflict
- ASIC Report 840 (13 Oct 2026): at 7 of 8 large aggregator groups, brokers did not recommend the cheapest loan in more than 20% of cases; more than 80% of home loans now go through brokers
- Conflicted remuneration is banned: no volume or campaign bonuses; standard upfront and trail commission is permitted and must be disclosed in the credit guide
WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Comparison rates are calculated on a secured loan of $150,000 over 25 years for home loans and a loan of $30,000 over 5 years for car and personal loans, unless the lender states another basis. Business loans and equipment finance for a business purpose have no mandatory comparison rate.
What does a mortgage broker cost you?
Usually nothing. Moneysmart puts it plainly: lenders generally pay mortgage brokers a commission for distributing their products, so you do not pay them directly. Mozo cites ASIC data that around 85% of brokerage firms do not charge the borrower any upfront fee. How mortgage broker commission is worked out, and what each lender pays, has its own guide with a calculator. The cost that does land on you is the loan itself, its rate and fees, which the home loan repayment calculator turns into a monthly figure.
When a broker does charge a fee
| Situation | Why a fee appears | What to check | Source |
|---|---|---|---|
| Commercial and business loans | Lender commission is lower, capped or absent on some facilities, so the broker charges for the work | Whether the fee is fixed or a percentage, and whether it is refunded if the loan does not settle | Home Loan Experts; the business loan broker guide |
| Very small loans | Upfront commission on a small balance would not cover the hours | Compare with a fee-free broker or applying direct | Home Loan Experts |
| Complex files | Unusual income, security or structure needing extra work | What the fee covers and whether it is payable on decline | Home Loan Experts |
| Loans paid out within two years | The lender claws back the broker's upfront commission | Only lawful if a fee-for-service was disclosed in writing before work began; a "clawback recovery fee" added afterwards would likely breach the Act | Mozo; MFAA factsheet (brokers cannot recoup clawback from clients) |
| Fee-for-service brokers | A small number charge you and rebate or decline commission | The total against the commission model over the loan's life | Everglow (fee-for-service guide) |
Whatever the reason, the process is the same. Moneysmart publishes that where a broker charges you directly they must set out the proposed fee in a written quote, that you must sign the quote before the broker can provide services and request payment, and that a broker is not entitled to request a fee otherwise. If you are unsure whether a fee is reasonable, Moneysmart's advice is to ask around or look online to see whether other brokers charge for similar services and what they charge.
What the best interests duty requires
Part 3-5A of the National Consumer Credit Protection Act, in force since 1 January 2021, requires a mortgage broker to act in the best interests of the consumer when providing credit assistance and, where there is a conflict between the broker's interests and the consumer's, to give priority to the consumer's. ASIC's Regulatory Guide 273 explains what ASIC looks for when it assesses compliance and the steps a licensee can take to reduce the risk of breaching it. The MFAA translates it for borrowers: personalised recommendations that consider your situation, goals and preferences; clear explanations of why particular loans are suggested; balanced information to compare the benefits and drawbacks of each; a transparent process with full disclosure of how the recommendation was reached; and records showing how the advice meets the duty. Its member survey reports brokers present an average of three loan options and hold an average of 23 lender accreditations.
| Obligation | What it means on your file | What you should see |
|---|---|---|
| Act in your best interests | Understand your situation, needs and objectives before recommending; consider the products the broker can access and compare them; recommend the one that serves you, not the one that is easiest to settle | A fact-find, more than one option, and a written reason for the recommendation (Moneysmart: ask why this loan is in your best interests) |
| Conflict priority rule | Where the broker's pay or relationships conflict with your interests, yours win | The commission structure disclosed, and no unexplained preference for one lender |
| No conflicted remuneration | Volume-based and campaign-based commissions and soft-dollar benefits are banned; standard upfront and trail are permitted | The credit guide lists commissions by type and percentage, not bonuses tied to volume |
| Cost is important but not everything | A dearer loan can be in your best interests if its features or policy fit are what you need, with the reason recorded | An explanation of why a cheaper option was not chosen |
| Records | The broker must be able to show how the recommendation met the duty | A preliminary assessment and recommendation you can keep |
Emu Money's guide to the duty is candid about how it fails: commissions and volume bonuses that steer recommendations, narrow panels used without documenting why excluded lenders were unsuitable, unverified fact-finds, and recommendations made without evidence. Its point that disclosure alone does not manage a conflict is the one ASIC makes too, which is why the reforms banned the conflicted payments rather than merely requiring them to be declared.
What ASIC found in 2026 (Report 840)
On 13 October 2026 ASIC published Report 840, a review of best interests duty and complaints handling at 13 credit licensees across eight large mortgage broker aggregator groups, covering representative data from 1 April 2023 to 31 March 2025. ASIC Commissioner Alan Kirkland said mortgage brokers can play a critical role in one of the most significant financial decisions Australians make, and that more than 80 per cent of home loans are now arranged through brokers.
ASIC found that brokers' practices generally aligned with its guidance, but that licensees and aggregators could strengthen loan recommendation practices, supervision and complaints handling. Seven of the eight aggregator groups reported that brokers did not recommend the cheapest loan option in more than 20 per cent of cases. ASIC accepted that a higher-cost loan can be appropriate when features or circumstances justify it, but found instances where brokers did not have clear evidence to support those recommendations. Complaints about the best interests duty took longer to resolve than other complaints, and ASIC saw complaints missed, withdrawn without full investigation, or delayed.
ASIC expects licensees to monitor recommendations, particularly where a lower-cost loan was available, and to require stronger evidence when the cost difference is large. For a plain-English read of what that means for the "cheapest loan" question, see will a mortgage broker get me the cheapest home loan?
Who the duty does not cover
Bank staff selling their own bank's loans. The MFAA's duty page states that banks and other lenders are not bound by it, and the MFAA factsheet makes the same contrast. A bank owes you responsible lending obligations, meaning it must not give you a loan that is unsuitable, but it has no obligation to find you the best one or to consider anyone else's. That asymmetry is the strongest argument in the broker versus bank comparison. The duty also applies only to credit assistance on consumer credit; a broker arranging a commercial loan is outside it, which is one reason commercial brokers more often charge a fee and why you should ask how a business loan broker is paid.
How to check a broker before you start
- Licence. Moneysmart: make sure they have a licence to give credit advice or are a representative of a licensee. The credit guide states the licence number; search it in the Credit Licensee or Credit Representative list on ASIC's professional registers to confirm it.
- Credit guide. It must be given before credit assistance and sets out the lenders dealt with, how the broker is paid, any fees to you, and the complaints process.
- Questions. Moneysmart's script: How do you get paid for the advice you are giving me, and does it differ between lenders? Why did you recommend this loan and why is it in my best interests? What fees will I pay on the loan, and how do the fees and features affect its cost?
- Options. The broker should present more than one, explain each, and show lenders other than your preferred one so you can compare.
- If it goes wrong. Complain to the broker's business in writing; if unresolved, the Australian Financial Complaints Authority provides free, independent dispute resolution.
Your Finance Guide connects you with one licensed broker who meets our criteria. Our credit guide sets out how brokers are usually paid (upfront and trail commission from the lender, and the ranges) and the partnership fee brokers pay us to receive enquiries, which is paid by the broker, not by you.
More on mortgage brokers
How they are paid, the broker-or-bank question, and our own disclosures.
Broker fees and duty FAQs
How much does a mortgage broker cost in Australia?
How much does it cost to see a mortgage broker?
Is it worth paying a mortgage broker?
What is the best interests duty for mortgage brokers?
Does a mortgage broker have a fiduciary duty?
Do mortgage brokers get you the best rate?
What did ASIC find about mortgage brokers in 2026?
Can a mortgage broker get you a better interest rate?
What can I do if a broker breaches the duty?
What is in a broker’s credit guide?
A broker with the duty on your side
The licensed broker you are matched with owes you the best interests duty, discloses their pay in writing first, and on a standard home loan is paid by the lender, not by you. Free to use, no obligation.