I'll give you the short answer first, because it's the one people don't quite believe: for the vast majority of home loans, using me costs you nothing. Not a fee, not a markup on your rate, nothing. So how does a broker make a living — and where's the catch? There isn't one, but you deserve to understand exactly how the money works. Here it is, plainly.
Who actually pays the broker
When your loan settles, the lender pays the broker a commission. Think of it like a travel agent or an insurance broker — the airline or insurer pays them for bringing a customer and doing the legwork. The bank would otherwise spend that money on its own branch staff and marketing to find you; instead, it pays a broker who's already done the matchmaking.
There are two parts to it, and both come from the lender:
- Upfront commission — a one-off payment when your loan settles, typically around 0.65%–0.70% of the loan amount. On a $600,000 loan that's roughly $3,900–$4,200, paid by the bank.
- Trail commission — a much smaller amount (around 0.15%–0.20% a year) paid to the broker each year your loan stays active. It's designed to pay brokers to keep looking after you after settlement, not just sign you up and vanish.
"But surely my rate is higher to cover it?"
No — and this is the part worth pinning down. The commission comes out of the lender's own margin, not your interest rate. You get the same rate through me as you'd get walking into that bank's branch yourself. The difference is that instead of one bank's products, I'm comparing your situation across 40+ lenders and negotiating on your behalf — which more often than not lands you a sharper rate, not a worse one.
You're not paying extra for a broker. You're getting a specialist who works for you instead of for one bank — at no cost to you.
What's "clawback" — and does it affect me?
You might see the word "clawback." It simply means: if a loan is repaid or refinanced very early (usually within the first 1–2 years), the lender can take back the upfront commission it paid the broker. It's an arrangement strictly between the lender and the broker — for standard residential home loans, it doesn't cost you a cent. I mention it only because you should never hear a term about your own loan and not know what it means.
The quick version
You pay: nothing (for standard home loans).
The lender pays the broker: an upfront commission at settlement + a small yearly trail.
Your interest rate: not marked up — same or better than going direct.
The rule that keeps a broker honest
A fair question follows: "If different lenders pay different commissions, won't a broker just push the one that pays them most?" That exact risk is why the law changed. Since 2021, every mortgage broker in Australia is bound by a Best Interests Duty under the National Consumer Credit Protection Act 2009. In plain English: I'm legally required to recommend what's genuinely best for you — and to justify that choice in writing, in a way that can be audited. Recommending a loan just because it pays me more isn't "frowned upon"; it's against the law.
It's a real protection, not a marketing line — and it's why I'll happily show you why I'm recommending a particular lender, every time.
Are there ever fees?
For everyday residential home loans — first home, upgrading, refinancing, investment — the answer is almost always no fee to you. The rare exceptions are complex commercial or specialist scenarios where a fee might apply, and in those cases it would be disclosed and agreed with you in writing up front, before you commit to anything. No surprises, ever.
So when I say the first call is free and obligation-free, I mean it literally — and now you know exactly why that's possible.