Most new loans in Australia are arranged through brokers, but how do they actually stack up against banks in terms of choice, speed, and service?
If you’re shopping for a home loan, your choice usually falls into two camps: go straight to a bank, or use a mortgage broker. Banks offer reliability and a trusted name, but their options stop at their own products — which don’t always mean the best rate or fit.
Brokers, on the other hand, act as your personal loan match-maker, comparing deals from dozens of lenders and sometimes negotiating exclusive discounts. With around 77% of new home loans in Australia now being arranged through brokers, according to the Mortgage and Finance Association of Australia, it’s clear that borrowers value the personalised advice, wider choice and convenience brokers bring.
Still, when it comes to approval times, service quality, and those all-important fees and rates, who’s really in the best position to get you the sharpest deal?
The power of choice
When it comes to netting a home loan with great terms, going directly to a bank still has its merits.
If you have an existing relationship, you may be able to negotiate special rates or access loyalty discounts that brokers can't always match, since they don’t have the final say in lender decisions. Some banks also run exclusive loan promotions for direct customers, and not every bank partners with every broker, which means some deals may only be available by applying directly.
Yet for overall choice and flexibility, banks rarely outshine brokers.
Brokers use sophisticated loan-comparison software and draw from a panel of dozens of lenders — including the big four banks Commonwealth Bank, Westpac, National Australia Bank and ANZ plus smaller lenders as well as tier-three lenders like credit unions — giving borrowers a wider view of what’s actually out there.
"If you want the best financial deal when it comes to a loan, don't just go to one bank," says Melbourne-based Mortgage Choice broker Shawna Lavis.
Every borrower is different, Ms Lavis explains, from their income position, budget and deposit size to their target property and long-term goals.
"I spend a lot of time listening to clients to determine exactly what they want and need. And from week to week, I may recommend different banks depending on rates, policies and client needs," she says.
Brokers can be especially valuable for borrowers who don’t fit the standard lending profile, such as the self-employed, those with credit challenges or non-residents, she adds
"A broker can usually find you a solution. For example, only a few banks accept Centrelink benefits or parenting payments as income. We can assess the different options for you, and help save you an auto-decline from a bank if you apply directly and don't align with their policy."
Speed of approvals
Dealing directly with a lender means fewer middlemen, which can potentially simplify communication and speed up document processing and decision-making. You can also handle the paperwork and application details yourself, which can appeal to borrowers who prefer full control and don't want to rely on a broker’s schedule.
Ms Lavis admits that when it comes to turnaround times, banks likely win.
"The major banks don’t have to complete as much compliance as brokers. You can walk into the local branch of your bank — especially with one of the big four — and often have something sorted fairly quickly."
But service isn't all about speed, she adds.
"There's not that support that you would get with a broker. After you've got your pre-approval with a bank, you're often on your own until settlement. With a broker, we stay involved through the whole process, handling the paperwork and ensuring everything tracks smoothly."
Advice and Strategy
Beyond access to a wider range of lenders, brokers often bring personalised insight to your financial situation.
"Banks may issue electronically generated pre-approvals, but I prefer to walk clients through what they can realistically afford to borrow," says Ms Lavis.
"At Mortgage Choice, our software generates a graph for the client based on their finances. If their borrowing amount sits at the top of that graph, it usually means they’d be financially stretched.
"Getting the home and settling isn’t the end goal — it’s about owning the home and living comfortably. I help clients think practically about what’s sustainable for them."
Like many brokers, Ms Lavis stays in touch with her clients long after settlement to ensure their loan remains competitive.
"The market is always shifting, so it’s important to make sure you're always on the best rate," she says.
"Your bank might not proactively offer a better deal, but a broker can negotiate on your behalf or recommend alternatives that could save you money."
While brokers guide clients through refinancing decisions, they'll also ensure you're not refinancing too frequently, Ms Lavis adds.
"Too much refinancing can impact your credit score. A broker can talk through the implications of that and assess whether it truly makes financial sense before making that move."
Personal service
Going directly to a bank can sometimes mean dealing with different people along the way. The lending manager who opens your file may not be there by the time you settle. Brokers, by contrast, usually build long-term relationships with their clients.
"With first home buyer clients, I might reach out every six months, even if it's just a quick text or a call, to see how they're going," Ms Lavis says.
"If a client has expressed interest in an investment portfolio, I might flag when they've built up enough equity to purchase an investment property."
"If I know my client just wants to clear their debt, we can discuss repayment strategies and ways to stay on track through life changes."
Ms Lavis says the relationship with the client is as much about education and reassurance as it is about finance. When things get stressful, an effective broker will guide clients through the process and keep them calm, she says.
"At the end of the day, brokers are in your corner. We don’t work for the bank, we work for the client."
Source:https://www.realestate.com.au
