Questions to Ask Before Choosing a Mortgage Broker
Questions to Ask Before Choosing a Mortgage Broker
Choosing a mortgage broker is not simply about finding someone who can submit a home loan application. The right broker should take time to understand your position, explain the available options and recommend a loan structure that supports both your immediate needs and longer-term plans.
A home loan can remain with you for decades. Small differences in the interest rate, fees, loan term or structure may have a significant effect over time.
Before choosing a broker, ask questions about their experience, lender access, recommendation process, fees and ongoing support. A professional broker should welcome those questions and provide clear answers.
What Does a Mortgage Broker Do?
A mortgage broker acts as an intermediary between you and potential lenders.
Their role may include:
Assessing your financial position
Estimating your borrowing capacity
Reviewing your deposit or available equity
Comparing suitable loans from their lender panel
Explaining interest rates, fees, features and lending policies
Recommending an appropriate loan and structure
Preparing and submitting your application
Liaising with the lender, conveyancer and other parties
Managing the application through to settlement
Reviewing the loan after settlement where ongoing service is offered
A broker does not approve the home loan. The lender makes the final credit decision after assessing the borrower, property, supporting documents and applicable lending criteria.
Why Does Choosing the Right Broker Matter?
Different brokers may have access to different lenders, experience and support systems. They may also approach research, communication and loan structuring differently.
A good broker should do more than identify a lender willing to approve the application. ASIC has emphasised that professional mortgage advice should involve recommending loans that suit the customer’s circumstances and priorities, at an appropriate price given the other options available. [1]
The following questions can help you understand how a broker works before you decide to proceed.
1. Are You Licensed or Authorised to Provide Credit Assistance?
A mortgage broker must hold an Australian Credit Licence or operate as an authorised credit representative of a licence holder.
Ask for the broker’s:
Credit licence or credit representative number
Business name
Name of the licence holder they operate under, where applicable
Credit guide
You can check a broker or broking business through ASIC’s Professional Registers Search. The register can show whether the person or organisation is licensed or authorised and whether conditions apply to the registration. [2]
Moneysmart warns that a broker who does not appear as a credit licensee or credit representative may be operating illegally. [3]
2. Can I See Your Credit Guide?
Anyone engaging in credit activities must provide a credit guide.
The document should contain information such as:
The broker or business details
Credit licence or representative information
How to access the complaints process
External dispute resolution details
Information about certain costs that may apply
Moneysmart explains that a credit guide includes the licence number, external dispute resolution membership and the types of costs a borrower may pay. [4]
Read the document and ask the broker to explain anything you do not understand.
3. Which Lenders Can You Access?
Mortgage brokers generally work with an approved panel of lenders. The panel may include major banks, smaller banks, credit unions, mutual banks, non-bank lenders and specialist lenders.
Ask:
How many lenders are on your panel?
Which types of lenders do you regularly use?
Are there lenders you cannot access?
Will you tell me if a suitable option sits outside your panel?
Do you tend to place a large proportion of clients with only a few lenders?
No broker represents every lender or home loan in the market. The important issue is whether the broker has enough suitable options for your circumstances and clearly explains the limits of their access.
Moneysmart recommends asking what types of lenders a broker works with and which lenders they cannot access. [3]
4. Do You Have Experience With Borrowers in My Situation?
Lending can become more complex when the application involves:
Self-employed income
Casual, contract or variable employment
Overtime, bonuses or commissions
Parental leave
A small deposit
A guarantor
Construction finance
Investment property lending
Multiple properties
Trust or company structures
Previous credit issues
Refinancing and debt consolidation
Ask the broker whether they regularly assist clients with circumstances similar to yours.
Experience does not guarantee approval, but it may help the broker identify suitable lender policies, anticipate documentation requirements and avoid applying to a lender unlikely to accept the scenario.
5. How Will You Assess My Financial Position?
A broker should complete a detailed review rather than relying solely on an online borrowing calculator.
They may ask about your:
Income and employment
Regular living expenses
Existing loans and credit limits
Savings and deposit
Property equity
Dependants
Credit history
Future plans
Preferred loan features
Expected changes to income or expenses
Ask how the broker will verify the information and whether they will explain the assumptions used in the borrowing assessment.
An accurate assessment depends on accurate information. Be cautious of anyone who suggests excluding debts, understating expenses or providing information that is incomplete or misleading.
6. How Much Can I Borrow—and How Much Should I Borrow?
Borrowing capacity is the amount a lender may be prepared to approve under its assessment criteria. It is not necessarily the amount that will feel comfortable within your household budget.
Ask the broker to show you:
The estimated maximum borrowing capacity
Repayments at your intended loan amount
Repayments if interest rates increase
The funds required for the deposit and purchasing costs
The amount remaining as a financial buffer
The effect of credit cards and other debts
A broker should help you understand both what may be available and what the repayments could mean for your day-to-day finances.
7. Why Is This Loan in My Best Interests?
Mortgage brokers are required to act in the best interests of consumers and prioritise the consumer’s interests when providing credit assistance. ASIC’s Regulatory Guide 273 explains how these obligations apply during the mortgage broking process. [5]
Ask the broker to explain:
Why the recommended lender is suitable
Why the loan amount is appropriate
How the loan meets your stated needs and priorities
Which alternatives were considered
Why other options were not recommended
What disadvantages or limitations apply
The answer should be specific to your circumstances. A general statement such as “this is a good lender” does not explain why the recommendation is suitable for you.
8. What Other Loan Options Did You Compare?
A broker should be able to present and explain suitable alternatives.
Ask to see:
More than one loan option where suitable alternatives are available
The lowest-cost suitable option considered
The interest rate and comparison rate
Upfront and ongoing fees
Repayment estimates
Relevant loan features
Important restrictions or conditions
Moneysmart states that a broker should present more than one option and explain how each loan works, what it costs and why the recommendation is in the borrower’s best interests. [3]
If only one option is presented, ask why other lenders or products were ruled out. There may be a valid policy reason, but it should be clearly explained.
9. Is the Lowest Interest Rate Automatically the Best Loan?
Not always.
A low advertised rate may come with:
Higher application or ongoing fees
Limited offset or redraw access
Restrictions on additional repayments
Fewer suitable loan splits
A shorter interest-only period
Strict property or income policies
Less flexible banking features
ASIC notes that the lowest interest rate does not automatically equal the cheapest loan or best value when other costs, features and available options are considered. [1]
Ask the broker to compare the complete cost and suitability of each option, not only the headline rate.
10. What Fees and Costs Will Apply?
Ask for a clear breakdown of possible costs, including:
Loan application or establishment fees
Property valuation fees
Settlement fees
Annual package fees
Monthly account fees
Offset account fees
Government registration charges
Lenders Mortgage Insurance
Fixed-rate break costs
Discharge fees
Broker fees, where applicable
Legal or conveyancing costs
Some fees are charged by the lender, while others may be charged by third parties or the broker.
The lowest-rate loan may not be the lowest-cost loan after fees and features are considered. Moneysmart recommends asking how a loan’s fees and features affect its overall cost. [3]
11. How Do You Get Paid?
Lenders generally pay mortgage brokers a commission when a loan settles. This commonly includes an upfront commission and an ongoing trail commission based on the loan amount or balance.
Ask:
What commission may be paid?
Does the amount differ between lenders?
Will the commission influence the recommendation?
Is any commission repayable if the loan is closed or refinanced early?
Could I ever be charged a fee relating to early repayment or commission clawback?
Brokers must disclose information about commissions they may receive. [3]
Commission does not automatically mean the recommendation is unsuitable. The broker’s best interests obligations require the customer’s interests to be prioritised when providing credit assistance. [5]
12. Will I Pay a Broker Fee?
Many brokers are paid by the lender and do not charge the client directly. Some may charge a fee for particular services, complex applications or circumstances disclosed in advance.
Ask:
Will I pay any fee directly?
What service does the fee cover?
When does it become payable?
Is it refundable if the loan does not proceed?
Are there circumstances where another fee could apply later?
Where a broker charges a direct fee, Moneysmart states that it should be clearly communicated and set out in a written quote that the client signs before the broker provides the service and requests payment. [3]
Never assume a service is free. Request written confirmation of any fees or circumstances in which a fee could be charged.
13. Which Loan Features Do I Actually Need?
Features can be valuable when they suit the way you manage money. They can also add unnecessary cost when they are not used.
Ask the broker to explain whether you may benefit from:
An offset account
A redraw facility
Additional repayments
Multiple loan splits
Fixed or variable interest
Principal-and-interest or interest-only repayments
Loan portability
Package discounts
A linked credit card
Ask for practical examples showing how the feature works and what it costs.
Moneysmart recommends comparing repayment types, interest rates, fees, loan terms and features such as offset and redraw when choosing a home loan. [6]
14. How Should the Loan Be Structured?
Loan structure can be just as important as lender selection.
Ask the broker:
Should the loan be fixed, variable or split?
Which loan portion should an offset account be linked to?
Should different borrowing purposes be kept in separate splits?
Which property will secure each loan?
Will multiple properties be cross-collateralised?
How might the structure affect a future sale or refinance?
Does the proposed term extend the time I will remain in debt?
The structure should consider your current purchase as well as future plans, such as converting a home to an investment property, purchasing again or refinancing later.
Tax outcomes depend on the use of borrowed funds and individual circumstances. Obtain advice from a registered tax agent before relying on a particular structure for tax purposes.
15. What Documents Will You Need From Me?
Ask for a complete document checklist early in the process.
Depending on your circumstances, documents may include:
Identification
Recent payslips
Bank statements
Employment letters
Tax returns and notices of assessment
Business financial statements
Evidence of savings or equity
Statements for existing loans and credit cards
Rental income evidence
Purchase contracts or building documents
Providing complete and accurate documents can reduce delays and help the broker identify potential issues before the application is submitted.
16. What Type of Pre-Approval Will I Receive?
Pre-approval can vary between lenders and may be based on different levels of assessment.
Ask:
Has my financial information been fully reviewed?
Has a credit assessor considered the application?
Which documents have been verified?
What conditions remain?
How long is the pre-approval valid?
Will another credit enquiry be required if it expires?
Are there property types or locations the lender may not accept?
Pre-approval is not unconditional approval. The lender still needs to accept the property, complete any required valuation and confirm that all conditions have been satisfied.
17. What Could Prevent Final Approval?
Ask the broker to explain the main risks before you sign a contract or bid at auction.
These may include:
A lower-than-expected property valuation
Changes to income or employment
New debts or higher credit limits
Increased living expenses
Changes to lender policy
An unacceptable property type
Expired pre-approval
Missing or inconsistent documents
Insufficient funds to complete the purchase
A professional broker should explain what to avoid between pre-approval and settlement, including applying for new credit or making major financial changes without advice.
18. How Will You Communicate With Me?
Clear communication is especially important when finance and settlement deadlines are involved.
Ask:
Who will be my main contact?
Will I deal directly with the broker or a support team?
How often will I receive updates?
Will updates be provided by phone, email or text?
What happens if the broker is unavailable?
How quickly are questions usually answered?
Will you liaise with my conveyancer, solicitor or real estate agent where appropriate?
You should understand who is managing each stage and how urgent issues will be handled.
19. What Support Will You Provide After Settlement?
The broker relationship does not necessarily need to end when the loan settles.
Ask whether the broker provides:
A settlement confirmation
Help setting up repayments or offset accounts
Explanations of loan features
Regular interest-rate or loan reviews
Support with repricing requests
Assistance with future refinancing
Guidance when your circumstances change
Interest rates, loan products and personal circumstances change. Moneysmart recommends reviewing a home loan regularly to check whether the rate, fees and features remain suitable. [7]
Confirm whether ongoing reviews are automatic or need to be requested.
20. What Is Your Complaints Process?
Even when you expect a positive experience, it is reasonable to understand how concerns will be handled.
Ask:
Who should I contact first if there is a problem?
How do I make a written complaint?
Who is responsible for internal dispute resolution?
Which external dispute resolution scheme applies?
Moneysmart recommends raising the issue with the broker first, then making a written complaint to the business if it is not resolved. If the issue remains unresolved, the Australian Financial Complaints Authority provides free and independent dispute resolution for eligible financial complaints. [3]
The complaints information should also appear in the broker’s credit guide.
Warning Signs to Look Out For
Consider obtaining a second opinion if a broker:
Refuses to provide licence or representative details
Will not explain their lender panel
Presents only one option without a clear reason
Avoids questions about commissions or fees
Guarantees approval before the lender has assessed the application
Pressures you to proceed immediately
Recommends understating expenses or withholding debts
Cannot explain why the loan suits your circumstances
Focuses only on the advertised interest rate
Does not explain important conditions or risks
Is consistently difficult to contact
A good broker should communicate clearly, document the recommendation and give you enough information to make an informed decision.
What Should a Good Mortgage Broker Provide?
A strong mortgage broker relationship should provide:
A detailed assessment of your circumstances
Clear explanations without unnecessary jargon
Access to a suitable range of lenders
Transparent information about commissions and fees
More than one option where appropriate
A personalised recommendation
A well-considered loan structure
Honest discussion of risks and limitations
Regular communication throughout the application
Support beyond settlement where offered
You should feel informed and comfortable asking questions at every stage.
Speak With Homefront Mortgages
At Homefront Mortgages, we take the time to understand your financial position, property plans and priorities before comparing suitable lending options available through our lender panel.
We explain the recommended loan, applicable costs, key features and important conditions in clear language. We also manage the application process from initial assessment through to settlement and remain available when your lending needs change.
Whether you are purchasing your first home, refinancing, investing or building, speak with Homefront Mortgages to understand your options and approach the lending process with greater confidence.
Important Information
This article provides general information only and does not constitute personal financial, credit, tax or legal advice. It does not take into account your objectives, financial situation or individual needs.
Loan availability, borrowing capacity and approval are subject to lender assessment, satisfactory documentation, property valuation, eligibility requirements and applicable lending criteria. Interest rates, fees, terms, lender policies and conditions may change. Fees and charges may apply.
Homefront Mortgages does not represent every lender or home loan available in the market. Obtain independent legal, financial or tax advice where appropriate before making a decision.
References
ASIC, The Best Interests Duty: A Blueprint for Building Trust: https://www.asic.gov.au/about-asic/news-centre/speeches/the-best-interests-duty-a-blueprint-for-building-trust
ASIC, Professional Registers Search: https://www.asic.gov.au/online-services/search-asic-registers/professional-registers-search/
Moneysmart, Using a Mortgage Broker: https://moneysmart.gov.au/home-loans/using-a-mortgage-broker
Moneysmart, Credit Guide: https://moneysmart.gov.au/glossary/credit-guide
ASIC, RG 273 Mortgage Brokers—Best Interests Duty: https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-273-mortgage-brokers-best-interests-duty
Moneysmart, Choosing a Home Loan: https://moneysmart.gov.au/home-loans/choosing-a-home-loan
Moneysmart, Pay Off Your Mortgage Faster: https://moneysmart.gov.au/home-loans/pay-off-your-mortgage-faster
