How Mortgage Brokers Work: What We Do, How We’re Paid, and Why It Matters

The short answer

A mortgage broker compares loans from many lenders, recommends the right one for you, and manages the process from application to settlement and beyond. Brokers are usually paid by the lender, so there’s generally no cost to you.

Just as importantly, the way brokers are paid gives us every reason to look after you long term, not just until settlement.

What a broker does

1. Understands your situation: your income, expenses, deposit, goals and plans.
2. Compares lenders: rates, policy and borrowing capacity across our panel.
3. Recommends the right loan: and explains why, in writing.
4. Handles the application: paperwork, lender questions and approval.
5. Manages you to settlement: working with your conveyancer, agent and lender.
6. Looks after you beyond settlement: rate reviews, refinances and your next purchase.

Broker vs a bank’s home finance manager

Banks employ home finance managers, also called lending specialists, to write home loans for their bank. Their focus is on settling new loans with that bank, and their role generally doesn’t include reviewing your loan after settlement.

	Mortgage broker	Bank home finance manager
Lenders offered	Many lenders across a panel	One bank’s products
Legal duty	Must act in your best interests	Must meet responsible lending obligations
After settlement	Ongoing rate reviews and support	Generally no ongoing review
Paid by	The lender, through upfront and trail commission	The bank, as an employee

How brokers are paid

Brokers are usually paid by the lender you choose, not by you. There are two parts:

• Upfront commission: a one-off payment when your loan settles, based on the loan amount.
• Trail commission: a smaller ongoing payment, based on your loan balance, for as long as your loan stays with that lender.

Commission rates are similar across lenders, and we disclose them to you upfront in your credit guide and quote.

Clawbacks and trail: why we look after you long term

What’s a clawback? If your loan is paid out or refinanced within the first one to two years, the lender typically takes back some or all of the broker’s upfront commission. That’s called a clawback.

What’s trail? Trail is only paid while your loan stays with the lender. If you leave unhappy, it stops.

Why that’s good for you: together, clawbacks and trail mean a broker is rewarded for keeping you in the right loan over time, not for writing as many loans as possible. It’s in our interest, and yours, to keep your rate competitive, review your loan regularly, and be there for your next step.

That’s why we review your rate every six months and negotiate with your lender, so you don’t need to leave to get a better deal.

Best interests duty

Since 2021, mortgage brokers have been legally required to act in your best interests, and to put your interests ahead of their own when there’s a conflict.

That means if moving your loan is genuinely better for you, we have to tell you, even if it means a clawback for us. Our job is to get you the right outcome.

Myth: “You’ll get a better deal going direct”

Brokers can usually access the same rates as going direct, and often better, because we can request sharper pricing from lenders on your behalf. More importantly, we compare options a single bank can’t, including the lender with the right policy and borrowing capacity for you.

More than 8 in 10 Australians now use a broker

Mortgage brokers facilitated a record 81.6% of all new residential home loans in Australia in the June 2026 quarter, up from 53.9% in June 2018, according to the Mortgage and Finance Association of Australia (MFAA).

As lending gets more complex, more Australians are choosing expert guidance and access to more lenders.

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With over a decade of lending experience and access to over 40 lenders, our team of lending specialists walks you through every step, from the beginning, to settlement and beyond.

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General information only. This article does not consider your objectives, financial situation or needs and is not credit, financial or tax advice. Market share data: MFAA Quarterly Market Share Report, June 2026 quarter. Seek advice from a licensed credit adviser before acting. Insight Property Finance.