Brokers now write 4 in 5 home loans, and the banks' own numbers show why they mind

Brokers wrote 81.6 per cent of all new residential home loans in the June quarter, a record $139.08 billion of lending, according to Cotality data commissioned by the Mortgage and Finance Association of Australia (MFAA) and reported on 3 September. That is up from 81.0 per cent in March and 77.6 per cent a year earlier. The MFAA's chief executive, Anja Pannek, points out that Australia is now one of only three countries, with the United Kingdom and the Netherlands, where brokers handle more than 80 per cent of mortgage lending. Four loans in five no longer start at a bank counter.

Before going further, the conflict of interest, because it matters in a piece like this. Your Finance Guide works in conjunction with ALG Australian Lending Group (ACL 505575), and licensed brokers who meet our criteria pay us a partnership fee to receive enquiries from this site. Those brokers are usually also paid a commission by the lender when a loan settles, so we have a commercial interest in borrowers choosing brokers. Read everything below with that in mind. We have tried to build the argument only on figures the banks and the broker industry have published themselves, and every one of them is linked at the bottom so you can check us.

What CBA told its shareholders

Commonwealth Bank's full-year results presentation on 12 August is unusually frank about this. Slide 74 is headed "Fundings weighted towards proprietary distribution", which is bank language for loans written by its own staff and app. Next to it sits the claim that proprietary home loans are about 20 to 30 per cent more profitable than broker loans. The footnote says the comparison is an average home loan return on a $600,000 loan, with broker returns adjusted for upfront and trail commissions and for lower operating expenses. Read that twice: CBA concedes broker loans are cheaper for it to process, and still says they earn 20 to 30 per cent less once the broker is paid.

Now look at slide 75. In the second half of FY26, 49 per cent of new home lending across CBA and Bankwest came through brokers, up from 46 per cent in each of the two previous halves. For the CBA brand alone the broker share rose to 36 per cent from 33 per cent. On our arithmetic from the same slides, Bankwest writes roughly 19 in every 20 of its home loans through brokers. So in the half where CBA told investors its own channel is the profitable one, its broker share went up.

NAB is further down the road CBA wants to take. Its third quarter trading update on 17 August said drawdowns through its own channels rose to 50.9 per cent in the September quarter, up from 47.7 per cent in the first half. More than half of NAB's new home loans now come through its own bankers, in a market where four in five go through brokers. In June we wrote about how the majors squeeze brokers on commission terms and accreditation. This is the other half of the same strategy: getting you to walk in on your own.

Why that 20 to 30 per cent is partly your rate

A bank's return on your home loan comes from one place: the rate you pay, less what the money costs the bank to raise, less its costs. Broker commission is one of those costs. According to the MFAA's own factsheet, upfront commission generally runs at 0.65 to 0.70 per cent of the amount drawn, net of any offset balance, and trail is generally 0.15 per cent a year of the outstanding balance, again net of offset. Lenders claw back the upfront commission if the loan is paid out within 18 months to two years. On CBA's own example of a $600,000 loan, a 0.65 per cent upfront commission is $3,900 and first-year trail is about $900, both before GST, with the trail shrinking as the balance falls. Those figures are illustrative, not what any particular broker earns.

Here is the point the investor slides do not spell out. When you go direct, the rate on a bank's standard product does not fall by the amount of commission it saved. The bank keeps that money as margin. Some of it comes back to you only when the bank has to compete for you, which is exactly what happens when a broker puts a rival lender's offer on the table and exactly what does not happen when a branch customer signs the first rate they are shown. That margin gap is money sitting between you and the bank, and who ends up with it depends on how hard someone pushes.

What the channel war looks like from your side of the desk

Direct-only deals. CBA's Digi Home Loan can only be applied for online through CommBank's website, NetBank or the app, and it is aimed at people refinancing to CBA from another lender. Its current Qantas Points offer (100,000 points on loans of $300,000 to $499,999, 200,000 on $500,000 to $999,999 and 300,000 on $1 million or more, at 80 per cent LVR or less) closes to applications this Wednesday, 30 September, and the terms state plainly that loan applications made by brokers are not eligible. CBA's Unloan brand is also sold direct only. The MFAA has argued for channel parity, meaning the same deal whichever door you use. Until that happens, the honest test of a broker is whether they tell you when a direct-only product beats everything on their panel for your file.

Cashback. Refinance cashback offers come and go, their terms set who can claim them and how, and most carry a claw-back if you leave early. We set out the traps in our June piece on cashback claw-backs. A cashback is a one-off payment; the rate is what you pay every month for years.

Retention pricing. The cheapest rate many borrowers will ever get is the one their existing lender offers when they say they are leaving, and that works no matter who wrote the loan in the first place. Our June piece on the loyalty tax covers how big the gap between new and existing customers can be.

Speed. CBA says about 70 per cent of home loan applications through its own channel are decided automatically on the same day. For a simple file with an auction on Saturday that is a real advantage, and the banks know it is their best argument for coming direct.

The honest counterpoint: your broker is paid by the lender too

None of this makes brokers free or neutral. The lender pays them, and the MFAA says commission rates are highly standardised across the market, which takes the edge off the incentive to steer you to one lender for money but does not remove every conflict. A broker can only recommend lenders they are accredited with. Brokers build habits and favourite lenders. The claw-back gives a broker a reason not to move you again within the first two years, and trail gives them a reason to keep you where you are after that.

What brokers do have, and bank staff do not, is a legal best interests duty, in force since 1 January 2021. That is worth something, but a duty is not proof. Moneysmart's own advice is to ask a broker what range of lenders they work with, how they are paid and whether that differs between lenders, and why the loan they recommend is in your best interests. Our earlier piece on ASIC's broker focus sets out six more questions worth asking. If a broker shows you a single option, or goes vague when you ask what they will be paid, walk.

How to use either channel well

1. Ring your current lender's retention team first, whoever wrote your loan and whatever the RBA does on Tuesday. Ask what rate they will give you to stay. It costs nothing, needs no application and pays a broker nothing.
2. If you go direct, go to at least two lenders and tell each one what the other offered. Check the direct-only products too, and read their eligibility rules and offer deadlines before you count on them.
3. If you use a broker, before you hand over a single payslip ask three things: how many lenders are on your panel and how many you actually compared for my file, which lenders you placed most of your loans with in the past year, and what you will be paid upfront and in trail on each option you show me.
4. Ask the broker straight out whether any direct-only deal, or your own lender's retention offer, beats what they are recommending. A good broker will tell you, even though they are paid nothing if you take it.
5. Compare on the comparison rate and fees over the years you will actually hold the loan, not on cashback, points or speed. Check any claw-back before you sign.
6. Get the recommendation and the reasons in writing, whichever channel you use. A bank's credit decision is not advice, and a broker's recommendation should explain why it beats the alternatives they looked at.

Disclosure: Your Finance Guide works in conjunction with ALG Australian Lending Group (ACL 505575). Licensed brokers who meet our criteria pay Your Finance Guide a partnership fee to receive enquiries from this site. The fee is paid by the broker, not by you, and is not added to your loan. Brokers are usually also paid upfront and trail commissions by the lender on loans that settle. We have a direct financial interest in borrowers using brokers, which is why the first step in the list above, calling your own lender for a retention rate, and the direct-only products mentioned, pay a broker nothing and are still sometimes the right answer. Broker share figures are the MFAA and Cotality June quarter 2026 data as reported on 3 September 2026; bank channel figures are from CBA's FY26 results presentation of 12 August 2026 and NAB's third quarter trading update of 17 August 2026; commission ranges are as published by the MFAA; CommBank offer terms are as shown on its website on 28 September 2026 and can change. The $600,000 commission figures are illustrative calculations, not quotes. This is general information, not personal advice.