---
title: "Mortgage Broker vs Bank in Australia: Why Brokers Now Arrange Most New Home Loans"
url: "https://agentfind.com.au/mortgage-broker-vs-bank-in-australia-why-brokers-now-arrange-most-new-home-loans/"
markdown_url: "https://agentfind.com.au/mortgage-broker-vs-bank-in-australia-why-brokers-now-arrange-most-new-home-loans.md"
type: "post"
date_published: "2026-08-19T09:54:30+00:00"
date_modified: "2026-09-14T03:39:30+00:00"
language: "en-US"
renderer_version: "3"
---

# Mortgage Broker vs Bank in Australia: Why Brokers Now Arrange Most New Home Loans

## Content

**![](https://agentfind.com.au/wp-content/uploads/2026/08/istockphoto-117247268-2048x2048-1-150x150.jpg)The Shift Is Real, and It’s Measurable**

In the December 2025 quarter, mortgage brokers arranged 76.7% of all new residential home loans in Australia, according to the Mortgage & Finance Association of Australia’s (MFAA) Quarterly Market Share Report, compiled using data from Cotality (formerly CoreLogic). That figure represents $142.2 billion in new lending — up 23.6% year-on-year from $115.05 billion in the December 2024 quarter — and it’s the highest broker market share recorded for any December quarter since the MFAA began tracking the metric in 2013.

This isn’t a one-off spike. The September 2025 quarter recorded an even higher 77.3% broker share — the highest single-quarter figure on record — on $130.23 billion in lending. Two years earlier, in September 2023, broker share sat at 71.5%. The trajectory is consistent and structural, not a temporary anomaly.

**Why the Shift Happened**

The most commonly cited driver, including from MFAA CEO Anja Pannek, is lending complexity. As credit policy has tightened and lender product ranges have multiplied, navigating a home loan application without independent comparison has become genuinely harder — and brokers, with access to a panel of typically 25–45+ lenders, are positioned to do that comparison on a borrower’s behalf in a way a single bank’s loan officer structurally cannot.

There’s also a regulatory dimension. Since the Best Interest Duty (BID) reform took effect in 2021, mortgage brokers have a legal obligation to act in the borrower’s best interest when recommending a loan — not merely a “not unsuitable” standard, but an affirmative best-interest test, documented in writing. A bank’s own lending staff have no equivalent obligation to consider products outside their employer’s range.

**Bank vs Broker: What Actually Differs**

**Product access.** A bank lender can only offer that bank’s own products. A broker can compare across dozens of lenders — major banks, regional banks, credit unions, and non-bank lenders — for the same borrower profile.

**Complex income assessment.** Self-employed borrowers, contractors, and company directors are frequently under-assessed by major bank credit systems calibrated for straightforward PAYG income. Specialist lenders accessed through brokers often use different serviceability methodologies — including “add-back” assessments that account for legitimate business expenses and depreciation — which can materially change a borrower’s assessed capacity for an identical income.

**[Cost to the borrower](/pricing-plan/).** Mortgage brokers are paid by the lender, not the borrower, via an upfront commission (typically around 0.5–0.65% of the loan amount) and a smaller ongoing trail commission. This must be disclosed in writing. There is, in the overwhelming majority of cases, no direct fee charged to the client.

**Refinancing diligence.** Lenders rarely proactively reprice existing customers without prompting — banks have limited incentive to alert you that a better rate exists elsewhere. A broker reviewing your loan annually has an explicit reason to flag when refinancing makes sense.

**When Going Direct to a Bank Can Still Make Sense**

It would be misleading to suggest brokers are always superior. Borrowers with very simple PAYG income, an excellent credit history, and a large deposit, who already hold a strong existing relationship with a bank offering genuinely competitive loyalty pricing, may find limited additional value in broker comparison — though it remains worth at least one comparison quote to confirm that assumption rather than accept it on faith.

**How to Choose a Quality Broker**

With ASIC licensing data indicating roughly 19,000-plus [accredited brokers](/listing-category/mortgage-broker/) operating nationally, quality varies. A reasonable due-diligence checklist:

![](https://agentfind.com.au/wp-content/uploads/2026/08/tanrica-online-shopping-10085367_1920-150x150.png)

- Confirm MFAA or FBAA (Finance Brokers Association of Australia) membership, which requires ongoing professional education
- Verify their Australian Credit Licence or Credit Representative status directly via ASIC Connect
- Ask how many lenders are on their panel, and which ones — a panel under roughly 20 lenders limits genuine comparison
- Ask for their commission disclosure in writing before proceeding
- For complex situations (self-employed, investment portfolios, credit history complications), look specifically for a broker who can demonstrate relevant recent experience, not just general competence

**A Red Flag Worth Naming Specifically**

Because commission structures can, in theory, create an incentive to favour one lender over another, it’s reasonable to ask a broker directly why they’re recommending a specific product over the alternatives they compared. Under Best Interest Duty, a broker should be able to articulate that reasoning clearly — better rate, better serviceability fit, better feature set for your situation — rather than a vague answer. A broker who becomes noticeably uncomfortable when asked to explain their recommendation, or who only ever seems to recommend the same one or two lenders regardless of borrower circumstance, is worth a second opinion before proceeding.

**Frequently Asked Questions**

**Does using a mortgage broker cost me anything?** In the large majority of cases, no. Brokers are remunerated by the lender, and under the Best Interest Duty must disclose this commission structure to you in writing before proceeding.

**Will using a broker affect my credit score more than going direct?** Generally the opposite. A broker typically pre-assesses your eligibility before formal submission, and submits to a smaller number of well-matched lenders, whereas approaching multiple banks directly can generate multiple separate credit enquiries.

**Why might my bank approve a smaller loan than a broker-sourced lender for the same income?** Different lenders apply different serviceability and income-assessment methodologies, particularly for self-employed or non-PAYG income. A broker’s value is partly knowing which lender’s assessment approach suits a specific borrower’s situation.

**Is broker market share data publicly available?** Yes — the MFAA publishes a Quarterly Market Share Report compiled with Cotality, based on Australian Bureau of Statistics housing finance data, and has done so for over 50 consecutive quarters since 2013.

![](https://agentfind.com.au/wp-content/uploads/2026/08/geralt-purchase-3113198_1920-300x200.jpg)

## Classification

- **Category:** Uncategorized