Most people start with the bank they already use. It is where the salary lands, the app is on the phone, and a loan feels like a natural next step. Plenty of people end up with a perfectly good loan this way. But it is worth knowing what you are comparing before you decide.

The core difference is simple. A bank lender can only offer you the bank's own products. A mortgage broker can put your situation in front of many lenders and work out which one suits it. Everything else follows from that.

How going direct works

You deal with a lender's own staff, either in a branch, on the phone or through a home lending specialist. They know their products well and can usually move quickly on a straightforward application. They are not able to tell you that another lender would treat your income more favourably, because another lender is not something they can offer.

Going direct is not a bad choice. If your finances are simple, your needs are simple, and you already know the loan is a good fit, it can be the fastest route.

How a broker works

A broker is paid by the lender once the loan settles, so for most residential loans there is no direct charge to you. That arrangement has to be disclosed in writing before you go ahead, and since 2021 brokers have been legally required to act in your best interests when recommending a loan. Some commercial or specialised lending carries a fee instead, which should be agreed up front. We break it down in how much a mortgage broker costs.

In practice, the broker collects your documents, works out what you are trying to do, chooses a lender and product that fits, prepares the application, and stays on it until settlement. Our guide to choosing a broker covers what to check before you sign anything.

Where the difference shows up

  • Non-standard income. Self-employed earnings, bonuses, commission, contract work and trust distributions are assessed differently from lender to lender. A bank that does not like your income type cannot send you somewhere that does. See our self-employed guide.
  • Borrowing capacity. Two lenders can look at the same finances and reach very different numbers. Our article on how much you can borrow explains why.
  • Structure. How debts are split, where an offset sits and whether properties are cross-secured will matter long after the rate has changed. That is a conversation about your plans, not a product pitch.
  • Policy quirks. Lenders have rules about things like deposits, guarantors, rental income and recent job changes. Knowing which lender is relaxed about which rule saves a lot of failed applications.

Where going direct can win

It is only fair to say where a broker is not essential:

  • You have a simple PAYG income, a decent deposit and a straightforward purchase.
  • You are comfortable comparing products yourself and know what to look for.
  • Your bank has told you what it can do and you have checked it against the market, even informally.

A broker is not magic. A broker who sends every client to the same two lenders is not giving you much more than a bank would. That is why the questions you ask matter.

The point people forget: your existing loan

Many borrowers only compare options once, at purchase, and never again. A loan that was competitive at the start can drift. Ask whoever you choose whether they will look at it again, and what would make them suggest a change or recommend leaving it alone. Our piece on when refinancing is worth it is a good place to start.

A fair way to decide

Ask your bank what it can offer and get the numbers in writing. Then ask a broker to do the same for your situation. If the broker can't show you something better or a better structure, you have lost an hour. If they can, you will know what the difference is worth.

If you are on the Northern Beaches or North Shore and would like a second opinion, talk to a Sabea broker or call 1300 001 755. We are licensed credit advisers in Forestville and compare more than 60 lenders.

Frequently asked questions

Is a mortgage broker cheaper than going to the bank?

For most residential loans a broker costs you nothing directly, as the lender pays them once the loan settles. The rate you get depends on the lender and your circumstances, not on whether you went through a broker, so compare the actual offers.

Can a broker get a better deal than my bank?

Sometimes. A broker can look across many lenders, which helps most when your situation is not straightforward. If your bank is already the best fit, a good broker should say so.

Do brokers have to act in my best interests?

Yes. Since 2021 mortgage brokers in Australia have been legally required to act in the best interests of the consumer when providing credit assistance.

Will using a broker affect my credit score?

A broker will usually make credit enquiries only when needed to assess your application. Ask how many enquiries they expect to make and why before you agree.

General information only. It does not take your objectives, financial situation or needs into account, and it is not credit or financial advice. Lender policy, rates and eligibility change regularly and vary between lenders — talk to us about your own circumstances before acting on anything here.