This article first appeared on awesomelendingsolutions.com.au.
When you need a home loan, you have two main choices: go directly to a bank, or use a mortgage broker. Both can work. The right choice depends on your situation and what you value. Here's a fair comparison.
The key difference
- A bank can only offer its own home loans.
- A broker can compare loans from a panel of lenders, which often includes major banks, smaller banks, credit unions and non-bank lenders.
Comparing the two
Choice
Bank: one lender's products.
Broker: many lenders' products, often dozens.
Advice and legal duty
Bank: must follow responsible lending rules.
Broker: must follow responsible lending rules and the Best Interests Duty, which requires brokers to act in your best interests and put your interests first if there's a conflict.
Cost
Bank: no broker fee.
Broker: usually no direct cost for standard home loans, as the lender pays the broker. Some brokers charge fees for complex deals and must tell you upfront.
Rates
Banks sometimes offer the same rates through brokers as directly. Brokers may also access rates or lenders you wouldn't easily find yourself. Neither option guarantees the lowest rate.
Service
Bank: you deal with the bank's staff, who may change over time.
Broker: you usually have one point of contact who manages the whole process and often stays with you after settlement.
Complex situations
Brokers often shine when your situation doesn't fit neatly into one bank's rules, such as:
- Self-employed income
- Casual or contract work
- Past credit issues
- Investors with several properties
- Using government schemes
- Unusual properties
When going direct to a bank might make sense
- You have a simple situation and a strong relationship with your bank
- Your bank offers a great deal for existing customers
- You're comfortable comparing the market yourself
Even then, it can be worth asking a broker to check whether your bank's offer is competitive.
When a broker might be better
- You want to compare many lenders without lots of credit enquiries
- You're a first home buyer and want help with schemes
- You have complex income or credit history
- You're an investor and need help with structure
- You're short on time
Does using a broker cost more?
For standard home loans, brokers are paid a commission by the lender. This doesn't increase your interest rate. In Australia, lenders generally pay similar commissions across loans, and the Best Interests Duty requires brokers to recommend the loan that suits you.
A real-world example
Hannah is self-employed and has been in business for 18 months. Her bank says it needs two full years of tax returns. A broker finds a lender that accepts one year of tax returns plus business statements, and she's approved for a competitive loan.
The 2026 picture
In 2026, the lending landscape is changing fast:
- Four rate rises have pushed the cash rate to 4.60%
- APRA's debt-to-income limit affects how many high-DTI loans each bank can write
- Each lender's appetite changes from month to month
A broker who sees many lenders' policies every day can often spot which lenders are best placed for your situation right now.
How to make the most of either option
Whichever path you choose:
- Gather your documents early
- Be honest about your income, expenses and debts
- Ask about fees and features, not just the rate
- Get everything in writing
- Review your loan every year
Questions to ask either one
Whether you speak to a bank or a broker, ask:
- What's the comparison rate, not just the advertised rate?
- What fees will I pay upfront and each year?
- Does this loan have an offset account?
- What happens when any discount or fixed period ends?
- How will you help me after settlement?
The answers will tell you a lot about whether the loan, and the service, will suit you over the long term.
Frequently asked questions
Do banks pay brokers?
Yes. Lenders pay brokers an upfront and ongoing commission. This is disclosed to you.
Can a broker get a better deal than my bank?
Sometimes. A broker can compare your bank's offer with many others, so you can see where it stands.
Will a broker include my bank in the comparison?
Usually, if your bank is on their panel. Ask.
Is my information safe with a broker?
Brokers must follow privacy laws and only share your information with lenders and others needed to process your loan. You can ask your broker to explain how your information is stored and used.
Talk to Awesome Lending Solutions
Every situation is different, and the right loan depends on your goals, income and timing. At Awesome Lending Solutions, we compare a wide panel of lenders and explain your options in plain English, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.
This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.
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