Written and reviewed by Megan Birot, OurTop10 Content Editor — Certificate IV in Finance and Mortgage Broking (FNS40821). Last reviewed September 2026.Most people pick a mortgage broker the same way they pick a plumber: someone at work used one, so they use the same one. Sometimes that works. Often it means you never find out what else was on offer. Here are the mistakes we see most, and what to do instead, whether you are in Sydney, Melbourne or Brisbane.
1. Taking one referral and stopping there
A friend’s broker got them a good result. That tells you the broker was right for your friend’s situation, not that they are right for yours. A first home buyer on a single PAYG income and a self-employed investor with two trusts need different lenders and different brokers.
Take the referral, then compare it against one or two others. Our city shortlists are a quick way to do that: Sydney, Melbourne and Brisbane. Every broker on them has at least five years in the job, 50 or more verified reviews and a team behind them.
2. Not asking how they get paid
Brokers are paid by the lender when your loan settles: an upfront commission when the loan settles, plus a smaller trailing commission each year the loan stays in place. You do not pay it directly, but you should know it exists. Ask two questions: does the commission differ between the lenders you are recommending, and do you charge me anything on top? A broker who is uncomfortable answering either is telling you something.
3. Only being shown one option
Since 2021 brokers have been bound by a legal Best Interests Duty. In plain terms, they have to recommend the loan that suits you, not the one that pays them the most, and they have to be able to explain why. In practice a good broker will put three to five lenders in front of you and talk you through why each made the list and what got ruled out. If you are shown one product and told it is the best, ask what it beat.
4. Signing without reading the loan you are getting
The advertised rate is the least useful number on the page. Look at:
- Comparison rate. Folds in most fees and gives a truer cost over the term.
- Fixed, variable or split. Fixed buys certainty for a set period; variable usually gives you an offset account and the freedom to pay extra.
- Interest-only. Common on investment loans, but the balance does not move while the interest-only period runs.
- Exit and switching costs. Discharge fees, break costs on a fixed loan, and what it will cost you to refinance in three years.
If any of it is unclear, ask the broker to walk you through the loan document line by line. That is part of the job.
5. Not checking they are licensed
Every broker in Australia has to hold an Australian Credit Licence or work under one as an authorised credit representative, and is regulated by ASIC. You can check a name or licence number on the ASIC professional registers in about a minute. Most reputable brokers are also members of the MFAA or FBAA, which require a Certificate IV or Diploma in Finance and Mortgage Broking and ongoing training.
“The biggest mistake we see is people choosing a broker off a single referral without checking what they are actually being offered. A good broker should be happy to explain their commission, show you more than one lender option, and answer direct questions without getting defensive. If they cannot do that, keep looking.”
Mary Nebotakis, CEO and Managing Director, Natloans
Why more than seven in ten borrowers now use a broker
More than seven in ten new home loans in Australia are arranged through a broker rather than directly with a bank. The reason is simple: a bank can only sell you its own loans, while a broker with a panel of 40 to 90 lenders can compare across the market, and you do not pay for the service. A broker also submits and manages the application, which matters when a lender comes back with questions two days before settlement.
What has changed recently
Most lenders now accept digital identity checks and online pre-approval, so a straightforward application can be turned around in two to three weeks. Anything involving a trust, a self-managed super fund or a government grant still takes longer, however digital the process. Lender competition is strong, and lender policies change almost weekly, which is one more reason a broker who is in the market every day beats a friend’s recommendation from 2023.
Before you sign with anyone
Do three things. Check the licence on ASIC. Ask how they are paid. Ask to see more than one option and why each one made the cut. Then, if you are in Sydney, Melbourne or Brisbane, compare them against our shortlist for your city.
FAQs: choosing a mortgage broker near you
Usually not. The lender pays the broker a commission when your loan settles. Some brokers charge a fee for complex work such as bridging loans or SMSF lending, and they must tell you before they start.
A bank can only offer its own loans. A broker compares dozens of lenders and is legally required to act in your best interests. Banks are not bound by that duty.
Yes. Some lenders will consider borrowers with a past default or a paid-out debt, and a broker will know which ones. Expect a higher rate and more paperwork.
Less than it used to. Most applications are done online and brokers work by phone and video. A local broker is useful when a suburb or building type has lender restrictions, which is common in high-density areas of Sydney and Melbourne.