Mortgage brokers are generally cheaper and more cost-effective because they compare rates across multiple lenders to find the best deal, whereas banks only offer their own products. Brokers often secure lower interest rates, saving money over the life of the loan. However, if you have a simple, straightforward financial situation, going directly to a bank might save you broker fees.
Going direct can work well if your situation is straightforward. But if you'd like access to a wider range of loan options, independent advice, and support with the application process, a mortgage adviser is the smarter choice.
Downsides to using a mortgage broker include potential conflicts of interest (pushing higher-commission loans), added fees (paid by you or baked into the loan), an extra communication layer that can cause delays, limited access to all lenders (some don't work with brokers), and inconsistent service quality depending on the broker's experience, with no guarantee they'll beat a direct bank offer.
When talking to a mortgage broker, avoid mentioning "side deals," asking about the maximum loan amount (instead of your budget), admitting to missed payments or maxed-out cards, discussing new credit/big purchases during the process, or changing jobs/income types, as these raise red flags about financial stability, income, and creditworthiness, jeopardizing loan approval. Be honest but focus on stability and preparedness, and always disclose down payment gift sources properly.
How Much Does a Mortgage Broker Cost? Mortgage brokers are paid a commission for their services, usually 1% to 2% of the loan principal. That means the mortgage broker fee can range from $1,000 to $2,000 for every $100,000 you borrow. It's usually paid by the lender but sometimes falls on the borrower.
In addition to potentially securing a better rate, mortgage brokers offer tailored advice and expert guidance to help you navigate the mortgage process. If you're looking for the most suitable rate, it's worth considering a broker who can open the door to options that may not be available to you directly.
These are the lenders that don't work with any mortgage brokers:
A mortgage broker will add a retail margin, or markup, to each wholesale rate. These two items, when combined, determine the final interest rate presented to the mortgage customer. Industry compliance and several other factors ensure that a specific mortgage broker earns the same markup on each loan they could offer.
From higher interest rates to less personalized service, getting a mortgage with your bank might not always be in your best financial interest. Exploring other lenders, such as mortgage brokers or credit unions, can open up more competitive options and save you money in the long run.
In the end, deciding where to get a mortgage is a decision only you can make. Mortgage brokers can give you several options that you may not find on your own. Still, if you have a good relationship with your bank, it could be better to skip the middleman and go directly through your financial institution.
According to ABS stats, in 2025, the average mortgage broker brings in between $85,000 and $105,000 per year. That's a fair bit more than the national average full-time income of $75,000. Some mortgage brokers, such as senior practitioners and practice owners, make even more than this.
If your major concern is simply getting a mortgage as quickly as possible, going to your own bank can be the quickest option for some people. If you're keen to get the most competitive rates and terms for your circumstances, however, it's probably best to look at the wider market.
Disadvantages of using a mortgage broker include potential fees (paid by you or lender), the risk of biased advice favoring higher commissions, limited access to lenders who don't work with brokers, and the possibility of initial estimates changing as the process moves forward. Their varying experience levels and the extra intermediary step can also slow down the process or add complexity, requiring careful vetting of the broker, note.
How can I get the lowest mortgage interest rate?
How much commission do mortgage brokers receive? Independent mortgage advisors usually receive a commission from the lender you end up choosing, known as a procuration fee. This typically amounts to around 0.35% to 0.4% of the mortgage value.
Here are the most common red flags to look for when a broker is trying to scare you into switching. If a broker opens the conversation by warning of penalties, audits, or skyrocketing costs — without reviewing your actual data — that is a red flag. A trusted advisor starts with facts and education, not fear.
You can afford between $294,633 – $425,642, but you should know the scenario. With a $100,000 salary, we had $30,000 for down payment and closing costs and $600 in monthly debts before the mortgage with a 720+ credit score. The interest rate here is around 6.99% with a 30-year term.
Working with a mortgage broker can offer significant benefits, including access to a wide range of lenders, expert advice, and potential cost savings. However, it's important to weigh these advantages against the potential drawbacks, such as fees and the possibility of conflicts of interest.