⚡ Quick Answer Mortgage brokers in Australia are paid by lenders, not borrowers. When your loan settles, the lender pays the broker an upfront commission (typically around 0.65% of the loan amount) and an ongoing trail commission (typically around 0.15% per year on the remaining balance). You do not pay extra for using a broker — the lender covers this cost. By law, brokers must disclose all commissions upfront and act in your best interests under Australia’s Best Interests Duty (BID).
If you’re applying for a home loan or refinancing in Australia, especially as a self-employed borrower, it’s important to understand exactly how mortgage brokers are paid.
Many Australians ask:
The good news is that Australian mortgage brokers are legally required to disclose how they are remunerated and act in the client’s best interests.
This guide explains everything borrowers need to know about mortgage broker commission in Australia, including lender-paid commission structures, brokerage fees and charges, remuneration disclosures, and the key questions to ask before choosing a broker.
Mortgage brokers in Australia are typically paid by lenders through upfront and trail commissions after a home loan settles. In most standard residential lending scenarios, borrowers do not directly pay the broker.
This payment model is known as lender-paid commission.
When a broker helps arrange a mortgage with a lender, the lender pays the broker a commission for introducing and managing the loan application.
These commissions are regulated and disclosed under Australian credit laws.
For self-employed borrowers, mortgage brokers often provide additional value by helping structure applications involving:
A lender-paid commission is compensation paid by a bank or lender to a mortgage broker when a loan settles and remains active.
The commission generally includes:
Most major Australian lenders, including banks and non-bank lenders, operate under this remuneration structure.
Importantly, lenders generally pay similar commission rates across the industry, which helps reduce conflicts of interest.
Under Australia’s Best Interests Duty, brokers must recommend loans based on suitability rather than commission outcomes.
Upfront commission is a one-time payment made to the broker when the home loan settles.
It is usually calculated as a percentage of the total loan amount.
For example:
The broker may receive approximately $5,200 before GST and aggregator splits.
Upfront commission compensates brokers for the work involved in:
For self-employed borrowers, this process is often significantly more complex than PAYG applications.
Experienced brokers may analyse:
This expertise can materially improve loan approval outcomes.
Trail commission is an ongoing payment made by the lender to the broker while the loan remains active.
Trail commission is typically calculated annually on the remaining loan balance.
For example:
The broker may receive approximately $975 annually.
Trail commission encourages brokers to provide ongoing support and long-term loan servicing.
This may include:
Trail commission also discourages unnecessary refinancing or “loan churn,” which is heavily regulated by ASIC.
Most mortgage brokers in Australia do not charge direct fees for standard residential home loans because they are paid through lender-paid commission.
However, some brokers may charge additional brokerage fees and charges in situations involving:
If fees apply, brokers must clearly disclose:
Always request fee disclosures in writing before proceeding.
Australian mortgage brokers are regulated under the:
Before arranging a loan, brokers must provide a mortgage broking remuneration disclosure document explaining:
This information is commonly included in:
According to ASIC and Moneysmart guidance, borrowers should carefully review these disclosures before signing any loan documents.
Since January 2021, mortgage brokers in Australia have operated under the Best Interests Duty (BID).
This legal obligation requires brokers to prioritise the borrower’s interests when recommending a loan product.
This means brokers must consider:
They cannot recommend a loan simply because it pays a higher commission.
This reform significantly improved transparency within the Australian mortgage broking industry.
Self-employed borrowers often face stricter lending requirements than PAYG applicants.
Many business owners strategically minimise taxable income, which can reduce borrowing capacity with some lenders.
An experienced mortgage broker understands how different lenders assess:
This knowledge can help self-employed borrowers access more suitable lending options and avoid unnecessary declines.
Importantly, many lenders pay similar commission structures, meaning experienced brokers often focus more on policy fit and servicing flexibility than commission rates.Questions to Ask a Mortgage Broker Before Signing
Before choosing a broker, ask the following questions.
A transparent broker should clearly explain:
Ask whether additional fees apply for:
A broader lender panel may provide better loan options, especially for borrowers with complex income structures.
Good brokers assess more than just interest rates.
They should compare:
Many brokers assist clients after settlement with:
Equity release strategies
Annual reviews
Rate negotiations
Refinancing opportunities
“Most lenders pay relatively similar commission rates, and brokers are legally required to comply with Best Interests Duty obligations.”
This is generally incorrect.
“Using a mortgage broker always costs extra.”
Most residential borrowers do not directly pay mortgage brokers.
The lender usually covers broker remuneration.
“Banks are cheaper than brokers.”
Not always.
Mortgage brokers often access multiple lenders, helping borrowers compare products and policies more efficiently.
For self-employed borrowers, this lender access can be particularly valuable.
Most mortgage brokers in Australia are paid by lenders through upfront and trail commissions, meaning borrowers usually do not pay direct fees for standard residential home loans.
Trail commission is an ongoing payment made by the lender to the broker based on the remaining balance of the home loan after settlement.
Yes. Australian mortgage brokers must provide remuneration disclosure documents outlining commissions, fees, and potential conflicts of interest.
No. Brokers must comply with Australia’s Best Interests Duty, meaning loan recommendations must prioritise the borrower’s financial interests and suitability.
Most lenders offer broadly similar commission structures, although rates and policies can vary slightly between lenders and aggregator groups.
For many self-employed borrowers, experienced mortgage brokers can provide valuable guidance around lender policy, borrowing structures, and complex income assessment requirements.
Understanding mortgage broker commission in Australia helps borrowers make more informed financial decisions and choose brokers with confidence.
Most Australian mortgage brokers are paid through lender-paid upfront and trail commissions, with borrowers typically not paying direct fees for standard home loans.
However, transparency matters.
Before proceeding with any broker or lender, borrowers should carefully review:
For self-employed borrowers, choosing an experienced mortgage broker who understands complex income structures can make a substantial difference in both borrowing capacity and loan outcomes.
We help Australian borrowers compare lenders, understand borrowing capacity, and navigate the home loan process with greater clarity and confidence.
Whether you’re purchasing a home, refinancing, investing, or running a business, our mortgage brokers can help you explore suitable lending options.
