Mortgage Broker vs Bank in Australia: Why Brokers Now Arrange Most New Home Loans
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. 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 operating nationally, quality varies. A reasonable due-diligence checklist:
- 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.
