What Does a Mortgage Broker Do? Why Using a Broker Could Save You Thousands

More than three in four new home loans in Australia are now arranged through mortgage brokers. According to the Mortgage & Finance Association of Australia (MFAA), brokers facilitated 76.7% of all new residential home loans in the December 2025 quarter — the highest December quarter share ever recorded. That’s not a coincidence. Australians are choosing brokers because the lending landscape is complex, the stakes are high, and having a specialist in your corner — at no cost to you — is hard to argue with.

What Is a Mortgage Broker?

A mortgage broker is a licensed credit professional who acts as an intermediary between you and lenders. Unlike a bank lender who can only offer their employer’s products, a broker has access to a wide panel of lenders — at Lagos Financial, that’s 60+ — and their job is to find the product that best suits you, not the lender.

Brokers are governed by the National Consumer Credit Protection Act 2009, must hold an Australian Credit Licence (or act as an authorised representative), and since 2021 are bound by a Best Interests Duty — a legal obligation to act in your best interests even when that conflicts with their commercial ones. Lagos Financial holds ACL 546774 and is an AFCA member (98399). For more on your rights, see our guide to Best Interests Duty.

The Assistance Process: From First Call to Settlement

Here is exactly what working with Lagos Financial looks like, based on our licensed assistance process:

Step 1: Understanding Your Needs

The process starts with a conversation about your objectives and financial position. We ask about income, existing debts, savings, and what you’re trying to achieve — whether that’s buying a first home, upgrading, refinancing, or investing. No obligation, no cost.

Step 2: Verifying Your Financial Position

To make a reliable recommendation, we need to verify your finances — typically payslips or tax returns, bank statements, identification, and existing debt details. As a licensed credit representative, we’re required by law to collect evidence of your financial position before making product recommendations. We can then provide you with a Preliminary Assessment document detailing how we determined any recommended loan is suitable — available on request for up to seven years.

Step 3: Lender Research and Comparison

This is where broker value is most tangible. With 60+ lenders on our panel — major banks, regional banks, mutual lenders, and non-bank specialists — we compare across interest rates, fees, offset and redraw features, and how each lender assesses your specific application. A direct applicant sees one answer. A broker client sees the full market.

Step 4: Recommendation and Application

We present our recommendation with clear reasoning — why this lender, why this product, and how it serves your goals. Under Best Interests Duty, the recommendation must genuinely be the most suitable option for you. Once you’re satisfied, we prepare and lodge the application.

Step 5: Approval to Settlement

We manage communication with the lender through credit assessment, any requests for further information, formal approval, and settlement preparation. You receive regular updates without chasing a call centre.

Step 6: Post-Settlement Review

The relationship doesn’t end at settlement. A good broker stays in contact, flags materially better options when they arise, and is your first call when your circumstances change. This ongoing service is one of the clearest differences between using a broker and going directly to a bank.

What Does a Broker Cost?

For the vast majority of borrowers, the service is completely free. Brokers are paid commissions by lenders — typically 0.5–0.7% upfront at settlement and 0.15–0.20% per year in trail commission — from the lender’s own margins, not from you. If you want to know exactly what commission will be paid on your loan, simply ask. We’re required to disclose it and we will. For a full breakdown, see our guide to how broker commissions work.

In rare cases involving complex situations, a broker may charge a direct fee. If so, it will be disclosed upfront in a written Credit Quote before any work begins.

Broker vs Bank at a Glance

Lagos Financial: What We Bring

Lagos Financial is a national brokerage with offices in Bondi Junction (Sydney) and Launceston (Tasmania), and Sam based in Brisbane. Our 60+ lender panel spans the major banks, challenger banks, and specialist non-bank lenders — giving us the range to find the right fit whether you’re a straightforward PAYG borrower or a self-employed investor with complex income. We operate nationally, which is particularly relevant for clients buying or investing interstate.

When to Use a Broker

The short answer: almost always. But these situations make broker engagement particularly valuable:

• First home purchase and the process feels overwhelming
• Self-employed income and uncertainty about which lenders will accept your documentation
• Building an investment portfolio requiring tax-effective loan structuring
• Declined by your bank and needing to understand other options
• Existing mortgage not reviewed in 2+ years — you may be significantly overpaying
• Buying interstate, where lender policies on postcode and property type vary significantly

Frequently Asked Questions

Does using a mortgage broker affect my credit score?

A broker lodges one application rather than several, minimising credit enquiries compared to approaching multiple banks directly. This makes the broker approach generally more credit-score-friendly than going direct to several lenders simultaneously.

Can a mortgage broker help with refinancing?

Absolutely — and refinancing is often where the greatest savings are found. If you haven’t reviewed your mortgage in 2+ years, the rate landscape has shifted significantly. A broker models the genuine savings after all refinancing costs to give you a real before-and-after comparison.

Is a mortgage broker the same as a financial adviser?

No. A mortgage broker is a credit specialist focused on finding suitable lending products. A financial adviser is licensed to advise on a broader range of financial products. For investment structuring questions — such as whether to use a trust — you’d engage a financial adviser separately, though a good broker will coordinate with yours.

What if I’m unhappy with my broker’s service?

Raise it directly first. Licensed brokers must acknowledge complaints within 1 day and resolve them within 30 days. If unresolved, you can escalate to the Australian Financial Complaints Authority (AFCA) at afca.org.au or 1800 931 678. Lagos Financial is AFCA member 98399.

Related Reading

• About Lagos Financial
• Our Mortgage Broker Services
• How Mortgage Broker Commissions Work
• Best Interests Duty: Your Rights as a Borrower

Work with a Broker Who Works for You

Lagos Financial offers a complimentary assessment — no obligation, no cost. We’ll review your situation, explain your options across 60+ lenders, and give you a clear picture of what you can borrow and at what rate. Whether you’re buying, refinancing, or investing, we handle the process from start to settlement. Book your complimentary assessment today.