If you already bank with one of the big four, calling them about your next home loan is the obvious move. You know them, they have your details, and it feels like the shortest path.
For plenty of people that works out fine. But “fine” and “best available to you” are not the same thing, and the gap between them is usually invisible until after you have signed.
This guide compares both options honestly. Where a bank genuinely wins, where a broker does, what the real downsides of each are, and how the answer changes depending on whether you are buying your first home, moving to your next one, refinancing, or buying an investment.
The short answer
A bank can offer you one set of products, assessed by one credit policy. A broker can put your situation in front of many lenders and find the one most likely to say yes on terms that suit you.
That difference matters most when your situation is anything other than straightforward. If your income is salaried, your deposit is large, and your credit history is clean, most lenders will want you and the gap narrows. If you are self-employed, buying with a small deposit, carrying other debt, or on a visa, lender choice stops being a detail and starts being the whole outcome.
What a bank offers, and where it works
Banks are not the villain here. Going direct makes real sense in some situations.
Where a bank works well:
- An existing relationship. If they have held your accounts for a decade, they know your income and repayment history. That can mean faster processing and sometimes better pricing.
- Bundled products. Offset accounts, package discounts, fee waivers. If you have a professional package with a rate discount attached, that is real money.
- Talking to the lender directly. When something goes sideways mid-application you are speaking to the decision-maker, not relaying messages through someone else.
- Private banking. Above roughly $750,000 to $1 million in total lending, some banks assign a relationship manager. That level of service is hard to replicate.
Where a bank falls short:
- They can only sell you their own products. CBA cannot recommend an ANZ loan, even when ANZ’s credit policy would approve you for more. A bank is one lender. That is the whole limitation in one sentence.
- One serviceability calculator. Lenders assess the same income and expenses differently. If your bank’s model says no at $600,000, another lender’s might say yes at $650,000 on identical numbers. You will never find that out by asking one bank.
- No obligation to act in your interest. This is the part most people do not know, and it is covered in detail below.
- The relationship goes quiet after settlement. You might hear from them if a retention campaign is running. Otherwise, silence.
What a broker offers
Access to a panel of lenders
Approov works with a panel of 30+ lenders. The number itself is not the point. What matters is that those lenders have different credit policies, different serviceability models, and different appetites for different kinds of borrower.
That variation is where the value sits. One lender counts overtime income in full, another discounts it. One accepts a two-year self-employment history, another wants three. One is comfortable with a 5% deposit under a government scheme, another will not go past 10%. A broker’s job is knowing which door you fit through.
Best-interest duty
Since January 2021, mortgage brokers have been legally required to act in your interest rather than the lender’s. This is the best-interest duty under the National Consumer Credit Protection Act.
Bank staff have no equivalent obligation. They are selling their employer’s products, which is a perfectly legitimate thing to do, but it is a different job to the one a broker is legally bound to perform.
Most Australians already use one
77.6% of all new residential lending in Australia now flows through mortgage brokers (June 2025, MFAA data). That share has risen every year for a decade. If brokers routinely delivered worse outcomes, the number would be moving the other way.
How the answer changes with your situation
The broker-versus-bank question does not have one answer. It has four.
Buying your first home
This is where a broker usually helps most, because first home buyers face the widest gap between what one lender will do and what another will. Deposit size, the First Home Guarantee and other low-deposit routes, lenders mortgage insurance, and whether a guarantor is on the table all change which lender fits.
Getting this wrong is expensive. Going to one bank, being told you need a 20% deposit, and waiting two more years to save it is the single most common avoidable outcome we see. See first home buyers for how the routes compare.
Upgrading to your next home
The complication here is timing, not eligibility. You are usually selling and buying at once, which raises questions about bridging finance, deposit bonds, and whether your settlements line up. Not every lender offers bridging, and the ones that do price it differently. A bank will tell you what it does. It will not tell you what the lender down the road does better. More on upgrading.
Refinancing
If you have been with the same lender for years without renegotiating, you are likely paying more than a new customer would for the same loan. The loyalty tax averages around $1,070 a year for Australian borrowers.
Your bank will not volunteer this. Ring and threaten to leave and you will usually get a retention offer, which tells you the discount existed the whole time. A broker compares your rate against what the market will actually give you. See refinancing.
Buying an investment property
Lenders vary most here. Rental income is shaded differently from one lender to the next, debt-to-income thresholds differ, and interest-only terms and pricing move around. If you plan to buy more than one property, how the first loan is structured affects whether the second gets approved. That is a strategy conversation, and a single bank cannot have it with you because it can only see its own book. See investment property loans.
Do brokers actually get better rates?
Honest answer: mostly no, and anyone promising otherwise is overselling.
Brokers access broadly the same rates as the banks’ direct channels. Sometimes a broker-only product appears. Sometimes a bank’s retention team beats a broker offer to keep a customer. The difference usually lands somewhere in the range of 0.05% to 0.15% either way.
On a $600,000 loan, 0.2% is about $1,200 a year. That is not nothing. But rate is the part of the decision people over-weight, because it is the only part that comes with a number attached.
The bigger variable is whether you get approved at all, for the amount you need, on a structure that does not create a problem later. A slightly better rate on a loan that leaves you short for your next move is the worse outcome.
The disadvantages of a broker, addressed honestly
No comparison worth reading dodges this part.
”Commissions create a conflict of interest”
Brokers are paid by the lender when your loan settles. Typically around 0.6% to 0.7% of the loan amount upfront, plus a trailing commission of roughly 0.15% to 0.2% a year. You do not pay the broker directly.
The concern is fair on its face. Does the broker steer you to whoever pays most? Under best-interest duty they are legally required not to, and commission structures must be disclosed to you before you proceed. It is not a perfect system. It is a regulated one, and it is more than a bank is required to do when selling you its own product.
”A middleman slows things down”
It can, if the broker is disorganised. A good one speeds things up by knowing which lender to approach, what that lender needs, and how to package an application so it does not bounce back for more documents. A poor one adds a layer of delay.
That is a question about the individual broker, not about the model.
”Quality varies enormously”
True, and this is the legitimate concern. Broker is a wide label. Some write hundreds of loans a year across every situation. Some write a handful. Some are strong on first home buyers and out of their depth on self-employed income or investment structuring.
The answer is not to avoid brokers. It is to ask the questions in the next section.
The one genuine case for going direct
If you have private banking access, a meaningful package discount, and a relationship manager who answers the phone, consolidating with that lender can genuinely be the better financial outcome. This mostly applies above about $1 million in lending at a single institution.
If that is you, get a broker to compare anyway. A good one will not be offended, and you will either confirm you are already well placed or find out you are not.
What happens after settlement
Most comparisons stop at approval. Get the loan, settle, done. For a debt you will hold for decades, that is a strange place to stop.
With a bank, the relationship is transactional once the loan settles. If a better rate appears, nobody calls. If your fixed term is ending, you may get a letter offering the current variable rate, which is rarely the best one available.
With most brokers, somewhat better. Some check in around the anniversary. Many move on to the next application.
The Approov model is built around not doing that. Your file stays with us after settlement rather than closing, so when your fixed rate is approaching expiry, when rates move, or when your equity position changes, those are things we are set up to raise with you rather than things you have to notice yourself. A licensed broker stays on the account for the strategy conversations. The intent is that the loyalty tax never quietly starts applying to you.
That is a service model, not a rate promise, and it is worth being clear about which one you are being sold.
How to choose a broker
What to look for:
- Relevant volume. Do they write loans like yours regularly? A broker who rarely handles self-employed applicants is not the right one for a self-employed applicant.
- Panel breadth. 30+ lenders is a reasonable benchmark. A narrow panel defeats the purpose of using a broker at all.
- They ask about your situation before talking product. If the first conversation is about rates rather than about you, that is the wrong order.
- A clear answer on what happens after settlement. Do they monitor anything? Will they contact you, or do they wait for you to call?
- Licensing you can check. Credit representative numbers are public. So is AFCA membership for complaints.
Questions worth asking:
- How many loans like mine do you write?
- Which lenders are on your panel, and which would you approach for me?
- How are you paid, and does it differ between lenders?
- What happens after my loan settles?
Red flags:
- Rate is the only thing discussed.
- No questions about your circumstances, plans, or timing.
- Vague or evasive about commission.
- No process at all after settlement.
The bottom line
For a straightforward loan with a strong existing bank relationship, going direct is a reasonable choice and sometimes the right one.
For everything else, a broker’s structural advantage is real: more lenders, a legal duty to act in your interest, and someone whose job is finding the lender that fits rather than selling the one they work for.
The more your situation departs from the textbook, the more that advantage is worth.
If you want to see what your options actually look like across a 30+ lender panel, book a strategy session. It takes 15 to 30 minutes, there is no obligation, and you will finish it knowing where you stand.
Frequently asked questions
Is it better to go through a broker or a bank?
It depends on how straightforward your situation is. With a strong existing bank relationship, a large deposit, and salaried income, a bank can serve you well. If you are self-employed, buying with a small deposit, carrying other debts, or want to compare what different lenders will actually approve, a broker covers ground a single bank cannot. 77.6% of new residential lending in Australia now goes through brokers.
What are the disadvantages of using a mortgage broker?
Three real ones. Brokers are paid commission by lenders, which is a conflict that best-interest duty regulates but does not eliminate. A disorganised broker can slow an application down. And quality varies widely, so the individual broker matters more than the label. If you have private banking access with significant discounts, going direct may also be better.
Do mortgage brokers get you better rates?
Usually not by much. Brokers access broadly the same rates as bank direct channels, with differences typically in the 0.05% to 0.15% range either way. The larger value is in which lender you end up with and whether you get approved for what you need, rather than in shaving the rate.
Does using a mortgage broker cost me anything?
For most residential home loans in Australia, you do not pay the broker. They are paid a commission by the lender once your loan settles. Some brokers charge a fee for complex or commercial work, and that must be disclosed to you in writing before you proceed.
Is a mortgage broker worth it for a first home buyer?
This is arguably where a broker helps most. Lender policies on deposit size, lenders mortgage insurance, government schemes, and guarantor arrangements vary a great deal, and those differences decide whether you buy this year or in two years. Asking one bank and accepting its answer is the most common expensive mistake.
Can a mortgage broker get me approved when a bank said no?
Sometimes, though nobody can promise it. A decline from one lender reflects that lender’s credit policy, not a universal verdict. Another lender may assess your income type, employment history, or existing debt differently. A broker’s role is knowing which lenders are likely to view your situation more favourably. If your circumstances genuinely fall outside responsible lending requirements, no broker should be arranging finance for you.
How do I check a mortgage broker is legitimate?
Every credit representative in Australia has a number you can verify on ASIC’s register, and every broker must belong to the Australian Financial Complaints Authority. Both are public. A broker who will not readily give you their credit rep number is not one to proceed with.