How to choose a mortgage broker

Why does your choice of broker matter?

A broker sits between you and a large part of the lending market. For a simple borrower with a good deposit and clean paperwork, most brokers will deliver a similar result. For anyone with a complicated file, such as self-employed income, a credit blemish, an unusual property or a tight deadline, the broker’s experience can decide whether the deal happens.

Choosing well is therefore less about finding the biggest name and more about finding someone with the right knowledge, who is properly registered, clear about how they are paid and willing to explain things plainly. This guide sets out the checks and questions that help. Ownright Custom Finance is itself a broking business, so we have written this to be useful whichever broker you end up with.

What should I check before I share any documents?

Start with registration. Moneysmart advises confirming that a broker holds a licence to give credit advice or acts as a representative of a licensee. It says to search ASIC’s Professional Registers Search, choosing “Credit Representative” or “Credit Licensee” from the register drop-down.

A few related points:

• ASIC explains that a credit representative is a person a credit licensee authorises to carry out specified credit activities on its behalf. The licensee remains responsible for monitoring and supervising its representatives.
• ASIC also says a licensee must confirm the representative holds current AFCA membership before authorising them, which gives you access to external dispute resolution if something goes wrong. Certain low-cost credit activity is exempt.
• ASIC may allocate each credit representative a number, and licensees have to notify ASIC of appointments.

Our companion guide, what is an Australian Credit Representative, explains the structure in more detail.

If you cannot find the broker on the register, or the details do not match, ask them. A genuine broker will have no difficulty giving you their licensee and representative details.

What does the best interests duty mean for me?

Parliament passed the best interests duty for mortgage brokers in February 2020 following the Financial Services Royal Commission. ASIC says the duty requires brokers to act in consumers’ best interests and put those interests first when providing credit assistance. It applies from 1 January 2021 after a temporary six-month exemption due to COVID-19, and ASIC’s Regulatory Guide 273 sets out its views on how brokers can comply.

Moneysmart puts the practical effect this way: brokers must act in your best interests when suggesting a loan, and you should expect them to explain why a loan suits you, including what it costs and how its features work.

Separately, responsible lending rules mean credit licensees must make reasonable inquiries about your financial situation, take reasonable steps to verify it and assess that the loan is not unsuitable for you. A good broker will be thorough in this area, and you can ask for a written copy of the assessment.

How do brokers get paid, and does it matter?

It matters because pay structures can shape behaviour. Moneysmart explains:

• Lenders usually pay brokers a commission, a percentage of the loan amount, typically paid upfront and then ongoing.
• Brokers must tell you about the commissions they may receive.
• Some brokers charge you directly. The proposed fee must be in a written quote that you sign before services begin, and Moneysmart notes that “a broker is not entitled to request payment of a fee prior to providing their services.”
• If a broker charges a fee, it is worth checking whether other brokers charge similar amounts for similar work.

At Ownright, we will tell you exactly how our arrangements work in writing before we proceed. We do not publish fee amounts here because they depend on the loan and your circumstances, and that is the right thing for any broker to be open about with you directly.

What questions should I ask at the first meeting?

Moneysmart’s suggested questions are a useful starting kit:

1. Which lenders do you work with, and which can’t you access?
2. How are you paid for this advice, and does that differ between lenders?
3. Why is this loan in my best interests?
4. What fees will I pay, and how do they affect the total cost?
5. Can you show me how the features work, and a lower-cost option?
6. What is the lenders mortgage insurance threshold, and how can I avoid it?

For complicated files, add some of your own:

• Have you arranged loans for borrowers like me before?
• What happens if the first lender declines?
• Do you work with non-bank and private lenders as well as banks?
• Who will actually handle my file day to day?
• How quickly can you give me a realistic view of my options?

Moneysmart also suggests bringing a list of must-haves and nice-to-haves to the first meeting, and reminds you that you do not have to accept the first loan offered.

Does a bigger lender panel mean a better broker?

Not necessarily. A long list of lenders sounds impressive, but what counts is whether the broker knows which of them suit your file. A broker with access to fewer lenders who understands the right ones can outperform a broker with a huge list and no feel for your situation.

For difficult loans, the question is often not how many lenders but which kinds. Bank-only brokers can run out of options quickly. Brokers who also work with non-bank and private lenders can cover more ground. Our non-bank lenders explained guide shows how that landscape differs.

What type of broker suits which borrower?

Your situation	What to look for
Simple purchase or refinance, clean file	Good service, clear fees, quick turnaround
Self-employed or low doc	Experience assessing business income and alternative evidence
Credit blemish or recent decline	Knowledge of specialist and non-bank lenders
Urgent or short-term need	Access to private and fast-moving options
Rural, commercial or unusual property	Specialist knowledge of the asset class
Complex structure (trusts, SMSF, multiple entities)	Experience with the structure and its lender policies

If your situation sits in the lower rows, our difficult home loans page explains how we approach those files.

What are the warning signs?

• Pressure to decide quickly without explaining alternatives.
• Asking for payment before doing any work. Moneysmart notes a broker is not entitled to request a fee before providing services.
• Vague answers about commission or fees.
• No registration details, or details that do not check out on ASIC’s register.
• Promises of guaranteed approval or a particular outcome before seeing your documents.
• Recommending only one lender with no comparison.
• Asking you to sign blank forms or to misstate information. Moneysmart’s guidance on debt consolidation also warns against anyone who rushes you, asks you to sign blank documents or will not put all costs and the interest rate in writing.

What does a worked example look like?

This is an illustrative scenario only and does not describe a real client.

A self-employed borrower is deciding between two brokers. One is quick, friendly and promises a fast approval, but gets vague when asked how they are paid and does not mention which lenders they cannot access. The other starts by asking about the business, explains commission and any fee in writing, shows the lender options and says plainly that one of them is likely to cost more but is the only realistic way to settle on time.

Neither broker can guarantee a result. The second, though, is giving the borrower what they need to make a sound decision, and has checked registration details the borrower could verify on ASIC’s register. Transparency and relevant experience are usually better signals than speed alone.

How does Ownright approach being your broker?

We start with listening. Director Trevor Scott has more than 40 years in finance and leads a team that works on loans many brokers avoid: difficult home loans, private mortgages, rural and farm finance, commercial and business lending. We work Australia-wide from our head office in Knoxfield, Victoria.

We explain how we are paid before we start, we tell you what lenders and structures might suit your file, and we look beyond the usual panel for options others miss. We do not promise approval, and we will tell you plainly if a different route is a better idea. You can read more about Ownright or contact us with any questions. When you are ready, start your enquiry on our apply page.

Is it worth using more than one broker?

Speaking to two brokers is reasonable, particularly when your file is unusual and you want a second view. The thing to avoid is letting two brokers lodge applications for you at the same time. Each formal application can leave an enquiry on your credit report, and the OAIC says enquiries stay on file for five years. Two parallel applications can also confuse a lender about who is acting for you.

A sensible approach is to have initial conversations with each, compare how they explain your options, fees and timing, and then authorise one to proceed. Tell the second broker politely that you have chosen someone else. Most professionals will understand, and the clarity protects your credit file.

Can I change broker part-way through?

Yes, but timing matters. If a broker has already lodged an application with a lender, switching can create overlap. Ask the first broker where things stand, including what has been submitted, what the lender has requested and what fees, if any, you have agreed to. Moneysmart’s guidance that a fee must be set out in a written quote you sign before services begin is a useful reference point for what you should have on paper.

If you are unhappy with service, raise it directly first. If it is not resolved, the broker’s licensee has a complaints process, and ASIC notes licensees must hold current AFCA membership for their representatives, which gives you an external dispute resolution option.

Does location matter when choosing a broker?

Much less than it used to. Brokers regularly work with borrowers across the country by phone, video and secure document sharing. For specialist situations, such as farm finance, a remote property or an unusual structure, experience usually counts for more than being in the same suburb. Ownright Custom Finance is based in Knoxfield, Victoria and arranges loans in every state and territory. Choose the person with the right knowledge and a manner you trust, then make sure communication is easy and regular.

What mistakes do people make when choosing a broker?

• Choosing on the first phone call alone. Take time to compare.
• Not checking registration.
• Focusing only on the headline rate. Fees, structure and exit terms matter.
• Not asking who handles the file.
• Assuming all brokers can access the same lenders. They cannot.
• Hiding facts. Credit issues or tax debts that surface later can sink an application.
• Taking the first loan offered. Moneysmart says you do not have to.

What should I bring to a first meeting?

• ID and proof of address.
• Recent income evidence: payslips, tax returns, BAS or bank statements.
• Details of current loans, credit cards and other debts.
• Your credit reports. Moneysmart says you can get one free every three months.
• Property details or the purchase contract.
• A short list of your must-haves and nice-to-haves.
• Your timeline.

With those in hand, a good broker can usually give you a sensible first view quickly. Call Ownright Custom Finance on 03 7043 7233 or send us the details, and test us against the questions in this guide.