Mozo guides

Mortgage broker fees

Mortgage brokers can offer a valuable service if you’re searching for a home loan. They can streamline the whole process and sometimes even make it cheaper. But because our main aim at Mozo is to save you money, we thought we better dig into the details to clarify exactly what these services could cost you.

Read on for a rundown of how using a mortgage broker could affect the cost of your home loan, and then decide for yourself if it’s worth it.

What fees will a mortgage broker charge me?

Mortgage brokers usually don’t charge you a fee directly, although they can if they choose to structure their business this way. Even if fees aren't part of the equation when choosing a mortgage broker, you do have to consider how they’re getting paid. It could have an effect on the advice they give you and therefore the overall cost of your home loan.

How do mortgage brokers make their money?

Brokers usually work on commission that's paid by banks and lenders as a percentage of the loan amount you take out. This can come in two parts: the upfront commission and a trailing commission.

The upfront commission is the most common, and the amount that's paid to brokers varies between lenders. As an example, if you ended up taking out a $500,000 home loan and your broker was working on a 0.5% commission, they would make $2,500 straight up.

The trailing commission is an ongoing payment also made by the bank or lender, and is generally a smaller percentage (usually around 0.15%) of the remaining loan amount for each year you hold the home loan. The 2017 Royal Banking Commission recommended the removal of this commission structure, but changes are yet to take place so it's still an option for brokers. 

How do broker commissions affect my home loan?

The important thing to remember about these commissions is that each lender can offer different rates. So, if your mortgage broker stands to make a 0.3% commission from one lender and a 0.7% commission from another, they may take this into consideration before recommending a mortgage to you.

However, brokers are obligated to be transparent around these facts, so you can question a choice if you're concerned.

It's also essential that you still compare other home loan options available in the market even if you're using a broker. There are some lenders which don't offer mortgage broker commissions, which means they can't be compared through brokerage services. These often include low-cost online mortgage lenders, which can present more affordable offers since they have fewer overheads than major banks. 

Will I save money on my home loan with a mortgage dealer?

That’s a tough one to answer. It depends on your broker, what deal they secure for you, and how much work you’re willing to put into doing your own research.

If you go with a mortgage broker, they may have access to deals you wouldn’t have otherwise. But if you've got the time and inclination, you can do the research yourself and potentially get a great deal from those online lenders not accessible through a brokerage.

Home loan guides
: Check out our handy guides on every subject from saving for a deposit to completing a mortgage application, so you’ve got the background knowledge to snag a great deal.

Home loan comparison tools: With this resource you can compare a bunch of home loans from big banks and smaller lenders side-by-side to assess heaps of options in one convenient place.

Home loan calculators: Once you’ve got a shortlist of home loans you like the look of, crunch the numbers with our home loan calculators and see what the deal looks like with your loan details and budget.

Tips for using a mortgage broker

  • First things first, you should be looking for low interest rates (and importantly low comparison rates), because just a small change in rates can mean big dollars. And if you're looking for the lowest cost loans, let your broker know – otherwise they might be investigating options which prioritise other features.
  • Ask your broker to disclose to you any fees, payments and commissions to do with their suggested home loans, so you can judge the situation for yourself.
  • Get your broker to walk you through the fees and features of the home loans they suggest. The devil's in the details, and you may not understand all the financial and legal jargon, so take your time with this.
  • Compare the offers from your broker with online research. If you can find a home loan with a better interest (and comparison rate) on Mozo, you can ask your broker to justify their recommendation. This way you can glean more insight into the special deals brokers might have access to, and whether or not they outstrip your own bargaining skills.
  • Get recommendations. Find a mortgage broker you trust, either by going with someone who has been recommended by friends or family, or by asking brokers for the contact details of some of their past clients so you can get a review of their work.

What if I don’t want to use a mortgage broker?

While a mortgage broker can be a helpful service for some homebuyers, they may not be for everyone. If you’ve got the time and enthusiasm for research, you can score yourself a great deal by comparing home loans yourself. Start with a few of the options below.

Home loan comparisons - last updated 27 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
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    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

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    Owner Occupier, LVR<70%

    interest rate
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    Initial monthly repayment
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    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

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    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

Olivia Gee
Olivia Gee
Money writer

As a personal finance writer at Mozo, Olivia investigates insurance, banking and property. After completing a double degree in journalism and media and communications, Olivia became a lifestyle editor at Time Out Sydney and freelanced for notable publications such as Guardian Australia and SBS News. Now she is Mozo’s resident car insurance enthusiast, and is certified (ASIC RG146 Tier 2) to provide general advice in general insurance. She also creates audible finance adventures as co-host of Mozo’s podcast, The Finance Burrito.

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

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