10-point checklist to choosing a mortgage broker
With the recent interest rate cut, and some lenders predicting further cuts this year, whether you’re looking to invest, you’re thinking of moving, or looking for a better deal on your mortgage, now might be the time to review finances and see what your borrowing options are.
A good mortgage broker can simplify this process, helping you find a loan tailored to your needs while potentially saving you time and money. But with thousands of brokers across the country, how do you pick the right one?
Here’s our checklist to help with the decision-making process.
1. Understand what a mortgage broker does
A mortgage broker acts as an intermediary between you and lenders, such as banks, credit unions, or non-bank institutions. They assess your financial situation, research loan products from their panel of lenders, and recommend options that suit your goals—whether that’s a low interest rate, flexible terms, or features like offset accounts.
Unlike going directly to a bank, a broker can compare multiple lenders, potentially uncovering deals you might miss. In Australia, brokers are often paid by lenders via commissions, so their service is usually free to you, though some may charge a fee.
2. Check qualifications and licencing
Mortgage brokers in Australia must hold an Australian Credit Licence (ACL) or operate as an authorised credit representative under a licensee, as regulated by the Australian Securities and Investments Commission (ASIC). Credentials include:
- Credit representative number and/or check ASIC’s Professional Registers online.
- Confirming membership with an industry body, like the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). To be a member of these industry organisations, the broker must adhere to codes of conduct, complete ongoing training and maintain high standards of service.
- A qualified broker should also have a Certificate IV in Finance and Mortgage Broking. Some may have a Diploma for more complex cases. This ensures they understand the market and legal requirements.
3. Assess experience and specialisation
Experience does matter. A broker who’s been in the game for years will have navigated rate hikes, cuts, and changing lender policies. Questions to ask include:
- How long have they been a broker? Look for at least 3-5 years for confidence in their expertise.
- Do they specialise in your situation? First-home buyers, investors, self-employed individuals, or those with poor credit need brokers familiar with their specific circumstances. For example, if you’re a freelancer, a broker experienced with low-doc loans could be key.
4. Ask to see their lender panel
A broker’s value lies in the range of lenders they work with. A broad panel increases your chances of finding a competitive deal. Questions to ask include:
- How many lenders do they represent? A good broker should have 20-40, including major banks, smaller banks, and non-bank lenders.
- Are they tied to one lender? There may be a legitimate reason, such as lenders specialising in certain financial situations (eg offering finance for people who are self-employed).
- Do they include lenders that match your needs? For instance, if you want a low-rate loan with an offset account, confirm they work with lenders offering those features.
5. How do they communicate?
Your broker should explain anything you don’t understand and be responsive.
- How quickly do they reply to inquiries? A good broker responds within 24-48 hours and keeps you updated throughout the process.
- Do they explain things simply? They should break down interest rates (fixed vs. variable), fees, explain how changes in the interest rate will affect your loan, and explain loan features without jargon.
6. Understand their fees and commissions
Are they upfront about costs? Most brokers earn a commission, but ask if they charge you directly. Under the Best Interests Duty, brokers are legally required to prioritise your needs over their own profit.
7. Read reviews and seek recommendations
Reputation and referrals speak volumes. Places to check include:
- Online reviews: Google, ProductReview.com.au, or even social media posts can reveal others’ experiences. Look for patterns—consistent praise for service or red flags like pushiness.
- Personal referrals: Ask friends, family, or colleagues who’ve recently bought property.
- Testimonials: Many brokers showcase client stories on their websites—cross-check these if possible.
8. Compare loan options, not just rates
A great broker doesn’t just chase the lowest rate, they find a loan that fits your life, and your goals. With variable rates averaging around 6% and fixed rates slightly lower post-cu t, consider:
- Features: Offset accounts, redraw facilities, or extra repayment options may save more long-term than the current percentage rate difference.
- Flexibility: Can they negotiate waivers on application fees or tailor terms?
- Future-proofing: With rates tipped to fall further in 2025, ask how they’d handle refinancing if better deals emerge.
- Request other loan options with a clear comparison of rates, fees, and benefits. This shows they’ve done the legwork.
9. Meet them (virtually or in-person)
It may seem obvious, but arrange a meeting before committing; a 15-minute call or meeting can reveal:
- Do they listen? A broker who asks about your income, goals, and timeline (e.g., buying in six months) is engaged.
- Are they pushy? If they rush you into a decision or dodge questions, walk away.
- Do they inspire trust? You’re sharing sensitive financial details—go with someone professional and approachable.
10. Understand the process and aftercare
A broker’s job doesn’t end at loan approval. Questions to ask include:
- Will they handle the application? They should liaise with lenders, manage paperwork, and troubleshoot issues (e.g., valuation delays).
- Do they offer ongoing updates and support? The best brokers check in post-settlement, especially if rates drop significantly, to see if it’s worth refinancing.
Final tips
- Shortlist 2-3 brokers: Compare lender panels, communication, and vibe before deciding.
- Avoid red flags: brokers who guarantee approval, skip details, or pressure you into quick decisions could be risky.
- Trust your gut: If something feels off and you’re not happy, keep shopping around!
Choosing a mortgage broker isn’t just about rates—it’s about finding a partner who simplifies a complex process and secures the best outcome for your individual circumstances. With the market shifting and rates likely to ease further in 2025, a skilled broker can potentially save you thousands over the life of your loan.
Take your time, do your research, and choose a broker who aligns with your needs and goals. With the right support, you’ll be well on your way to securing the best mortgage for your circumstances —your next property (and wallet!) will thank you for it.
Our aim is to give you information to help you make informed choices. With nearly 50 years of experience behind us, we’re always here for an informal chat to answer your property questions.
Find out more about our property management services and call us on 02 4954 8833, send us an email to mail@apnewcastle.com.au or pop into our Cardiff office.