How Do Mortgage Brokers Get Paid in Australia? Fees, Commissions and Your Rights

If you are considering a home loan, you may be wondering: how does a mortgage broker get paid, and does that affect the loan they recommend?

In Australia, mortgage brokers are commonly paid commissions by lenders when a loan settles. Some brokers also charge clients a fee. Understanding both arrangements helps you ask informed questions before proceeding.

How do mortgage brokers get paid in Australia?

For many residential home loans, the lender pays the mortgage broker an upfront commission after settlement and may pay an ongoing trail commission while the loan remains in place. The broker’s remuneration arrangements vary by lender, loan product and brokerage.

A commission is not the same as a fee charged directly to you. However, it is still important to understand how the broker is remunerated, what products they can access and whether any fees apply to your circumstances.

What is an upfront mortgage broker commission?

An upfront commission is generally a payment from the lender to the broker or brokerage after the loan settles. It is commonly calculated using an agreed percentage of an eligible loan balance, subject to the lender’s rules. The amount paid to an individual broker may differ from the amount paid by the lender to the brokerage or aggregator.

Illustrative example only: if a lender paid an upfront commission of 0.60% on an eligible $800,000 balance, the gross payment would be $4,800. This is a hypothetical calculation, not a statement of Fordable’s commission rate or a quote from any lender.

What is trail commission?

Trail commission is an ongoing payment some lenders make in relation to an existing loan. The amount and calculation method depend on the lender and contractual arrangements. It may change as the eligible loan balance changes and may stop when the loan is repaid or refinanced.

Trail commission does not mean that a broker is automatically providing a specified package of ongoing services. Ask your broker what post-settlement support they provide and how they are remunerated.

Do mortgage brokers charge borrowers a fee?

Some brokers charge no direct broker fee for standard residential loan applications; others charge fees, including for complex transactions or particular services. You should not assume every mortgage broker is free.

Before proceeding, ask whether you will pay an application, advice, brokerage or other service fee; when it becomes payable; whether it is refundable; and whether any fee could arise if your circumstances change. Any applicable broker fees and commissions should be disclosed through the required credit documentation.

Are mortgage brokers paid if your loan does not settle?

Lender-paid upfront commission is generally associated with a settled loan. However, whether a borrower owes any separate broker fee for work undertaken before settlement depends on the agreement and required disclosures. Review those terms before authorising the service.

What is mortgage broker commission clawback?

A clawback occurs when a lender recovers some or all of a previously paid commission under its contractual arrangements, commonly if a loan is repaid or refinanced within a specified period. The relevant period and amount vary.

Clawback is generally an arrangement between the lender and the broker or aggregator. Do not assume you are required to reimburse a broker because a lender claws back commission. If a broker proposes any borrower-paid fee linked to early repayment or refinancing, ask for the written terms and relevant disclosures before proceeding.

Does a lender commission influence which home loan a broker recommends?

Mortgage brokers providing credit assistance to consumers are subject to a legal best interests duty and must prioritise the consumer’s interests where a conflict arises. A recommendation should be based on the borrower’s individual circumstances, not on which lender pays the highest commission.

The lowest advertised interest rate is not always the lowest-cost or most suitable loan once fees, features, eligibility and the borrower’s requirements are considered. Where a higher-cost loan is recommended over an available lower-cost alternative, the reasons should be supportable and explained.

ASIC’s October 2026 review of mortgage broker practices highlighted the importance of clearly documenting why recommendations are in customers’ best interests, particularly where lower-cost alternatives are available.

What should you ask a mortgage broker before choosing one?

Do you charge me any fees, and when would they be payable?
How are you paid by lenders, including upfront and trail commissions?
Which lenders and loan products can you consider?
Why does the recommended loan suit my needs compared with the alternatives?
What is the total cost, including interest, fees and relevant loan features?
What happens if I refinance, repay early or my plans change?

Why remuneration transparency matters for business owners and property investors

For a business owner, executive or property investor, a home loan decision may involve complex income assessment, multiple properties, existing debts and plans for future borrowing. It is worth asking not only how the broker is paid, but also how the recommended structure addresses serviceability, flexibility, fees and future credit requirements.

Mortgage advice should remain focused on your credit needs. Decisions about investing, tax treatment, ownership structures and retirement planning may require separate advice from appropriately qualified professionals.

Frequently asked questions

Is a mortgage broker free in Australia?

Not necessarily. Many brokers receive lender commissions and do not charge a direct fee for a standard residential loan, but some brokers charge clients. Confirm the arrangements before proceeding.

Does using a mortgage broker mean I pay a higher interest rate?

Not automatically. Loan pricing depends on the lender, product and your circumstances. Compare the actual loan offer, fees and features rather than assuming one distribution channel is always cheaper.

Can I ask how much commission my broker receives?

Yes. Ask for an explanation of the remuneration arrangements and review the disclosures provided. ASIC sets requirements for disclosing relevant fees, commissions and indirect remuneration.

Can I refinance after using a mortgage broker?

Potentially, subject to your existing loan terms and any applicable costs, including fixed-rate break costs. Refinancing may affect the broker’s commission arrangements, but any new credit recommendation must still meet applicable obligations.

Talk to Fordable about your home loan options

Understanding how your broker is paid is one part of making an informed mortgage decision. Fordable helps Australian borrowers review lending options, lender requirements and home loan structures against their individual credit needs.

If you are purchasing, refinancing or considering finance for another property, contact Fordable to discuss your circumstances and the available next steps.

What has mattered most to you when choosing a mortgage broker: transparent fees, lender choice, loan structure or ongoing service? Share your experience or questions.

Credit licensing disclosure: Credit Representative 513965 is authorised under Australian Credit Licence 389328. Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.

General educational information only. This article does not provide personal financial, taxation, accounting or legal advice. Lending arrangements, fees and eligibility vary. All applications are subject to lender assessment.