When getting a home loan, you can approach lenders directly or use a mortgage broker. Both have advantages—here's how to decide which is right for you.
Going Direct to a Bank
Pros:
- Direct relationship with your lender
- May have existing relationship benefits
- One-stop-shop for all banking
Cons:
- Only see that bank's products
- No comparison across the market
- May not get the best rate
Using a Mortgage Broker
Pros:
- Access to 30+ lenders and hundreds of products
- Expert advice on loan structure
- Handle paperwork and negotiations
- Usually free for borrowers (paid by lender)
- Ongoing support and future reviews
Cons:
- Quality varies between brokers
- May not have access to all lenders
- Commission model can create conflicts
How Brokers Are Paid
Brokers receive upfront commission (0.5-0.7% of loan) plus trailing commission (0.15-0.25% annually). This is paid by the lender, not the borrower. Best Interest Duty laws require brokers to recommend suitable products.