How to Buy Property With a 10% Deposit in Australia

Thousands of Australians a month ask whether they should use a mortgage broker. They’ve heard brokers boast that they “save you time and money”, they’ve read the Reddit threads warning about commission bias, and they want to know which side is actually right.

For most Australian borrowers, the answer is brokers, by a long margin. There are scenarios where going directly to a bank genuinely makes more sense, though they’re narrower than most articles let on. The far bigger risk isn’t broker vs bank. It’s choosing a bad broker over a good one, where quality across the industry varies enormously and the wrong choice can cost you tens of thousands of dollars over the life of your loan.

This article walks through how brokers actually work, what they cost, when going direct is genuinely the play, and the red flags to watch for before you commit.

If you’d rather get the answer applied to your specific situation, our team is available for a free 15-minute call.

Key Takeaways

• A mortgage broker is an intermediary between the borrower and the lender.
• The biggest advantage of a broker is their ability to compare and stress test different loan products across 30 to 60 plus lenders.
• In Australia, brokers are legally required to act in your best interests under the Best Interests Duty.
• Brokers are typically free for the borrower; they earn a commission from the lender.
• Going direct to a bank only really makes sense in a narrow set of cases, mostly private banking clients, borrowers with significant business banking ties, or vanilla owner-occupiers using a direct-only online lender like Unloan.
• The biggest broker risk is choosing a bad one. We’ll show you how to spot the red flags before you commit.

What Does a Mortgage Broker Actually Do?

A mortgage broker acts as an intermediary between you and lenders, and is legally required to act in your best interests when recommending loan options. Their role is to help you find a loan that aligns with your goals and financial situation.

Depending on the complexity of your application, a broker may spend 15 to 40 hours supporting you through the process, including an initial consultation and borrowing capacity assessment, comparing options across their lender panel, packaging and submitting your application, securing pre-approval and formal approval, and providing ongoing support after settlement.

For a full walk-through of every step in the process, see our guide on what a mortgage broker actually does.

The Pros of Using a Mortgage Broker

Access to 30+ lenders, not just one.

Banks only offer their own products, meaning you would have to meet with multiple banks to get the same comparisons that a mortgage broker can easily access. The range of lenders a broker works with means you gain access to the Big 4, second-tier lenders, non-bank lenders and specialist lenders in one easy consultation. If you’re not sure why this matters, it’s worth reading our breakdown of big banks vs second-tier lenders for home loans.

Match the right loan to your financial situation.

A mortgage broker takes the time to understand your financial situation so they can recommend the home loan products best suited to your property goals.

Typically, there is no cost to you.

Brokers are paid by the lender, not by the borrower. We break down how this works in the costs section below.

Legal protection through the Best Interests Duty.

The Best Interests Duty took effect on 1 January 2021 under the National Consumer Credit Protection Act. In simple terms, this means mortgage brokers are legally required to act in the best interests of their clients when recommending loan products.

While brokers are typically paid commissions by lenders, this law obliges them to prioritise your needs and financial situation when making recommendations.

Banks, on the other hand, are not subject to the same Best Interests Duty when offering their own products, although they must still comply with responsible lending obligations.

They handle the paperwork and negotiations.

Gathering paperwork, going back and forth with the lender and nailing down the terms can be a lengthy process. The 15 to 40 hours a broker spends on your application is time you could be spending searching for your dream home.

Specialist expertise.

A mortgage broker is valuable for many home loans, but especially for non-standard borrowers. Many borrowers fall outside standard lending criteria, including self-employed applicants, expats, those with low deposits or bad credit, and SMSF buyers. Brokers can match you with the right lender and navigate the loan structuring.

Credentials and accountability.

Australian mortgage brokers must hold an Australian Credit Licence or operate as a Credit Representative, be MFAA or FBAA members, and carry professional indemnity insurance. So you can engage a broker with confidence knowing they are accredited and financially regulated.

Ongoing rate reviews.

Great brokers will provide annual rate reviews and flag when you should think about refinancing, whereas banks have no incentive to do this. We cover the top tips to spot a bad broker below, but you should always check that your broker provides ongoing support.

Our Honest Cons List of Using a Mortgage Broker

Different lender panels.

Not every broker has access to every lender on the market; some panels include fewer than 20 lenders, others have more than 60. A narrow panel means you may miss the best deal for your property goals. Always match with a mortgage broker who is upfront about their lender panel.

Commission honesty.

According to the MFAA Broker Remuneration Factsheet (2025), mortgage brokers in Australia are paid roughly 0.65% to 0.70% upfront commission and 0.15% trail commission (an ongoing annual commission for the life of the loan).

Some lenders on a broker’s panel may pay more than others, which can create a worry that there is a conflict of interest. However, the Best Interests Duty means a broker has to act in the best interest of the borrower, regardless of the commission arrangements with different lenders.

Always choose a broker who is transparent about their commission structure, so there is no ambiguity.

Some brokers are reactive, not strategic.

It pays to do your research. Some brokers in the industry are more task-based; they help you with the application process and then disappear. Director-led brokers, or those with deep financial experience, typically approach brokering with a strategic lens to help you structure a loan, provide ongoing advice and conduct annual rate reviews.

Quality varies enormously.

As with any industry, a Top 10 broker with 20 plus years of experience is very different from a recent graduate at a high-volume brokerage. If a broker is vague about their industry experience, that may be a red flag.

Some lenders don’t work with brokers.

A small number of direct-only lenders don’t offer commissions and therefore don’t have broker relationships. We cover this in our comparison of brokers vs direct lenders below.

You still need to do due diligence.

A broker does not remove your responsibility to dot the i’s and cross the t’s. You still need to read your loan terms, understand your serviceability, and compare your choices.

Some brokers charge a fee.

Not all brokers make their money solely through lender commissions. Some may charge you for certain services, so always ask for an upfront cost estimate.

How Much Does a Mortgage Broker Cost?

In Australia, a mortgage broker will usually cost the borrower nothing, as they are typically paid by a lender through a commission agreement.

How Do Mortgage Brokers Get Paid?

A standard setup includes an upfront commission and a trail commission paid by the lender:

• Upfront commission: Paid to the broker upon settlement of the loan. On average, between 0.65% and 0.70% of the loan amount.
• Trail commission: Paid on an ongoing annual basis for the life of the loan, typically around 0.15% of the loan amount.
• Some brokers charge direct fees to the borrower: Depending on the broker, they may charge fees for certain services. They must provide a written quote before you proceed.
• Clawback fees: Some broker terms include a clawback clause. If you refinance or discharge within 18 to 24 months of settlement, the broker may have to repay the upfront commission to the lender. A good broker therefore has a strong financial incentive to set up a loan that suits you long-term, not just at settlement.

When Might a Broker Charge You a Fee?

Broker fees in Australia are not the norm, but there are a few situations in which they may apply:

1. The loan is small and the earned commission won’t cover the broker’s services.
2. The application is unusually complex, such as SMSF loans, self-employed applicants or borrowers with bad credit.
3. Commercial or business-related loans may attract a direct fee.
4. Terms may stipulate that fees apply if you refinance or discharge shortly after settlement.

Is a Mortgage Broker Really Free? What’s the Catch?

It’s a fair question, and one almost no other guide answers honestly. Here’s how the model actually works.

The lender pays the broker out of the same margin it would otherwise spend on its in-house sales team, branch network and marketing. The commission is not loaded on top of your interest rate, and there is no kickback for steering you toward a worse loan because the Best Interests Duty makes that illegal.

Your interest rate is set by the lender based on your deposit, credit profile, income and loan size, regardless of whether you came through a broker or walked into a branch. In many cases brokers can secure better pricing than walk-in customers because they have direct lines to lender BDMs and bring volume.

The “catch”, to the extent there is one, is the clawback mechanism above. It means brokers want loans that work for the long term, which generally aligns with what you want too.

Your Legal Protection When Using a Broker

Many Reddit threads ask, “Are mortgage brokers really trustworthy?”, with some scepticism. The Best Interests Duty, which took effect on 1 January 2021 under the National Consumer Credit Protection Act, makes the answer simple: brokers are legally required to act in the borrower’s best interest.

If there is a conflict between what’s best for the broker (such as a higher commission rate from a particular lender) and what’s best for the borrower (such as a better home loan rate or product fit), the broker must always prioritise the borrower.

When you choose a mortgage broker, you choose an expert who is legally bound to act with your best interests in mind. When you choose a bank, the bank is not required to follow the same Best Interests Duty.

Mortgage Broker vs Going Direct to a Bank

At its core, the choice between a mortgage broker vs direct lenders mainly comes down to convenience and lender access. A broker can compare many lender products on your behalf, whereas a bank can only sell you its own products. Going direct gives you full control of the product choice and application process, but it also puts the entire workload on your shoulders.

When Going Direct to a Bank Genuinely Makes Sense

There are situations where going directly to a bank is the better choice, but they’re narrower than most articles let on:

1. You’re a private banking client or have a structural commercial banking relationship. If you’re a private banking client, or your home loan is tied to a meaningful business banking facility, your bank likely has discretion to price you in ways a broker can’t easily match because it’s protecting a much larger overall relationship. For everyone else, the “good relationship with my banker” feeling rarely translates to genuinely competitive pricing. The ACCC has repeatedly reported that existing customers pay more than new ones at the same bank, regardless of how friendly the relationship feels.
2. You can genuinely compare 10 plus lenders yourself. This means pulling live rate sheets (most aren’t published), modelling each lender’s serviceability calculator on your specific income, checking each lender’s policy on your situation, and then negotiating. Mortgage industry insiders and certain finance professionals can. If you’re Googling whether to use a broker, you probably can’t, and that’s not a slight. The comparison work is what brokers do for a living.
3. A direct-only online lender that genuinely fits your situation. Unloan, Athena and similar are genuinely competitive on rate for vanilla PAYG borrowers with simple loans, decent deposits and no plans to invest or restructure. The moment any complexity enters (investment property, self-employed income, offset features, split loans, future equity release), the headline rate stops mattering because either you won’t be approved or the missing features cost more than you save over the life of the loan.

When a Broker Is the Better Choice

There are many scenarios where using a mortgage broker is the stronger option:

1. You want to compare lenders but don’t have the time to do the legwork.
2. You need access to specialist lenders not easily available directly.
3. Your situation is non-standard, such as a low deposit, self-employed income or bad credit.
4. You value the Best Interests Duty protection that brokers are legally bound to.
5. You would appreciate an expert proactively reviewing your rate each year.

Mortgage Broker vs Online Lenders (Unloan, Athena, UBank)

Many lenders have set up online digital arms (Unloan, owned by CBA; UBank, owned by NAB), and there are also independent digital non-bank lenders like Athena. Their pitch is that you can “cut out the broker and access lower rates”, which sounds compelling until you read the fine print:

1. The products are generally designed for simple loan structures and vanilla borrowers. If you’re a self-employed investor, an SMSF borrower, or someone with a non-standard income, chances are you won’t be approved.
2. Advertised rates may look attractive, but typically include fewer features, such as no offset account, limited redraw, no split loans and no investment loans. These simplified products can be more affordable initially, but they limit what you can do over the lifetime of the loan.
3. Service is light by design. There are fewer touchpoints and no proactive rate reviews, so you carry the work of monitoring and refinancing yourself.

Online lenders may suit straightforward borrowers who value rate over service. Brokers earn their value the moment any complexity enters the picture.

Who Benefits Most From Using a Mortgage Broker?

Brokers are particularly useful for borrowers who need expert advice or who value the convenience a broker brings during the process.

First Home Buyers

If you’re unfamiliar with the home loan process, including loan-to-value ratio (LVR), Lenders Mortgage Insurance (LMI) and Stamp Duty, it pays to have a mortgage broker acting on your behalf. A good first home buyer broker will assess your deposit amount, financial situation and eligibility for government schemes to help you reach your home loan goal.

A mortgage broker is with you every step of the way and can help you get pre-approved for a home loan so you can start enjoying the exciting part of finding your first home.

Self-Employed and Business Owners

Home loans for self-employed applicants and business owners are often more complex because lenders assess income differently from standard PAYG applications. While PAYG borrowers can usually verify income with recent payslips, self-employed applicants may need to provide tax returns, ATO notices of assessment, BAS statements, and business financials.

Not every lender uses the same policy, so some are more flexible than others. A broker can match you with lenders that accept your income structure and guide you through requirements such as ABN history, financial statements and serviceability calculations.

Property Investors

For investment loan lending, serviceability calculations vary widely across lenders. If you’re directly comparing a range of lenders yourself, it can be incredibly time-consuming to read each set of terms and recalculate your serviceability.

A great broker can structure the investment loan you need for your financial goals, including tax efficiency, equity release and portfolio scalability. This is where a director-led broker with their own investment experience tends to add the most value, well beyond simple rate comparison.

Refinancers

Brokers are especially helpful for refinancers because they can compare multiple loans and check whether refinancing your home loan actually saves you money after fees.

Refinancing with your current lender is not always the smartest move, as there is often a loyalty tax where existing customers end up paying more than new ones. Refinancing with a different lender may only be worthwhile once discharge fees, exit costs and other expenses are weighed against the new rate.

A mortgage broker can help you assess all outcomes, compare multiple lenders and manage the application process.

Borrowers With Credit Challenges

If you have a poor credit history, such as previously declined loans, mortgage defaults or recent bankruptcies, your choice of lenders may be limited. Experienced brokers can help identify lenders with more flexible policies and guide you through the documentation needed for your application.

If your home loan is rejected, it may still be worth speaking to a mortgage broker. One lender’s decision does not necessarily mean you’ll be declined everywhere, and a broker may be able to match you with a more suitable lender.

How to Spot a Bad Mortgage Broker: Our Red Flags to Watch For

All mortgage brokers are bound by the Best Interests Duty to act in your best interest. However, this does not mean every broker delivers the same quality of service. A low-quality broker may simply help you with an application and disappear, whereas a great one will be a strategic partner for the long term.

These are the red flags we have seen over our 10 plus years in the industry:

1. They won’t disclose their lender panel. This is unfair to you as the borrower, because you need to know upfront which lenders and products they will be comparing for you. Always ask which lenders a broker works with. A good broker will answer transparently.
2. They won’t explain their commission structure. To remove any doubt about a conflict of interest, ask for a Credit Quote before any work begins. ASIC requires all brokers to give clear written disclosure of the remuneration they receive from the lender.
3. They recommend a product before understanding your situation. Any broker who names a lender in the first five minutes hasn’t assessed your financial situation properly and isn’t acting in your best interest.
4. They only show you one option. The Best Interests Duty requires a broker to present you with a considered set of options. If you’re only presented with one loan, always ask why.
5. They pressure you to sign quickly. In any industry, pressure selling is a red flag. Legitimate home loan deals don’t vanish overnight. A good broker will understand this is a major life decision and give you the time to process and decide.
6. They don’t have an Australian Credit Licence or Credit Representative number. Anyone engaging in credit activities (including mortgage broking) must hold an Australian Credit Licence or be an authorised credit representative of one. Always check ASIC’s Credit Licence register before engaging a broker.
7. They don’t mention Best Interests Duty. Every competent broker should be able to fully explain the legislation. It should underpin their company values.

A practical sense-check is also to read recent client reviews. The AFMS Group reviews page, for example, gathers more than 800 five-star reviews from past clients, which gives you a real-world view of what working with us looks like beyond marketing copy.

Questions to Ask a Mortgage Broker Before You Commit

We encourage all borrowers to ask questions in the first discovery call. A mortgage broker should leave you confident they are the right partner for what is often a life-changing process:

1. Are you MFAA or FBAA accredited?
2. How many lenders do you have on your panel?
3. What’s your fee structure and commission arrangement?
4. How much communication should I expect during the process?
5. Can you walk me through the Best Interests Duty and how it influences the way you operate?
6. How do you handle a situation where two products are equally suitable?
7. How many loans have you settled in the past year?
8. What’s your turnaround time from application to approval?
9. How will you review my loan ongoing?

For a longer list, see our full guide on questions to ask a mortgage broker.

Frequently Asked Questions

Is It Worth Paying for a Mortgage Broker?

Most mortgage brokers in Australia don’t charge you a direct fee; they earn their income through lender commissions. In rare situations, a broker may charge a fee for highly complex loans, but the fee must always be disclosed in an upfront Credit Quote. For most home loans and investment loans, the convenience of lender comparison, legal protection from the Best Interests Duty, and time saved easily justify engaging a free mortgage broker. When there is a fee, the benefits typically outweigh the out-of-pocket cost.

Is There a Downside to Using a Mortgage Broker?

Yes, there can be downsides for certain borrowers or situations:

1. Broker quality varies enormously across the industry.
2. You can’t access every lender from a single broker’s panel.
3. Some direct-only online lenders are unavailable through brokers.

Should I Be Concerned About a Mortgage Broker’s Commission Bias?

No, this is largely a historical myth. Since the Best Interests Duty took effect on 1 January 2021, brokers are legally required to act in the borrower’s best interest. If there is a conflict between what’s best for the broker (a higher commission rate with a particular lender) and what’s best for the borrower (a better home loan rate or product fit), the broker must always prioritise the borrower.

You are legally protected when you use a mortgage broker.

When Should I Contact a Mortgage Broker?

Ideally, as early as possible. You don’t need to have your deposit ready and be ready to buy before contacting a broker. They can help you calculate your realistic borrowing capacity, understand how LMI is calculated for different deposit sizes, and flag any serviceability issues early. Contact a broker before signing any contract of sale, so they can find the best home loan and pre-approval for your goals.

Do Mortgage Brokers Get You a Better Rate Than the Banks?

Often yes, but not always. Banks do sometimes release special offers or rates to direct customers. The bigger advantage of a broker is the ability to compare and stress test multiple loan products so you can make a fully informed decision. In many cases, a broker can match you with a product whose features suit your situation better, even when the headline rate is similar.

Should You Use a Mortgage Broker?

For most Australians, yes. The combination of access to 30 plus lenders, no out-of-pocket cost in nearly every case, and a legal duty to act in your best interest makes a broker the higher-value choice in almost every standard borrowing scenario. Going direct only really makes sense in a narrow set of cases, mostly private banking clients, borrowers with significant business banking ties, or vanilla owner-occupiers who fit a direct-only online lender’s product.

The real question isn’t broker or bank. It’s which broker. Quality varies enormously across the industry, and the difference between a task-based broker who disappears after settlement and a strategic, director-led broker who reviews your rate every year is the difference between an okay outcome and tens of thousands of dollars over the life of your loan.

Use the red flags and questions above to vet anyone you speak to. If you’d like to put us through the same test, we offer a no-obligation 15-minute strategy call where you can ask anything. With Andrew personally settling more than $700 million in loans for AFMS Group clients, and named one of the best mortgage brokers in Sydney for 2026, we’re confident we will meet the bar.

If you’re ready to explore your options:

Call 1300 659 756 Book a consultation

This article is general information only and does not constitute financial or credit advice. Speak to a licensed mortgage broker for advice tailored to your circumstances.