This article first appeared on awesomelendingsolutions.com.au.
A common question we hear is: "If I don't pay you, how do you get paid?" It's a fair question. Understanding how brokers are paid helps you trust the advice you receive. Here's how it works in Australia.
The short answer
For most standard home loans, mortgage brokers are paid by the lender, not by you. This is through commissions that are disclosed to you in writing.
Upfront commission
When your loan settles, the lender pays the broker an upfront commission. This is usually a percentage of the loan amount, calculated on the amount actually drawn down (minus funds in an offset account, under current rules).
Trail commission
Lenders also pay a small ongoing "trail" commission each month while your loan remains active. Trail commission rewards the broker for ongoing service, such as rate reviews, answering questions and helping with changes.
Does this cost me more?
Commission is paid by the lender from its own margin. It doesn't add a separate fee to your loan. You generally pay the same rate whether you go direct or through a broker.
Clawbacks
If you pay out or refinance your loan within the first year or two, lenders may "claw back" some or all of the broker's commission. This is a cost to the broker, not to you. Some brokers may ask you to cover a clawback in specific situations, but they must tell you this upfront in writing.
Do brokers ever charge fees?
Some brokers charge a fee, usually for:
- Complex commercial loans
- Specialist or private lending
- Situations where the lender pays little or no commission
Any fees must be disclosed to you before you proceed.
Protections for borrowers
Best Interests Duty
Since 2021, mortgage brokers must act in your best interests and prioritise your interests if there's a conflict. This means a broker must recommend a loan that suits you, not just the one that pays the most.
Ban on conflicted remuneration
Certain types of payments that could influence advice are banned, such as volume bonuses from lenders.
Commission caps and structure
Commissions are calculated on the loan amount drawn down and net of offset balances, which helps prevent brokers from encouraging you to borrow more than you need.
Disclosure
Your broker must give you a credit guide and a quote or disclosure explaining:
- Which lenders they work with
- How they're paid
- Any fees you'll pay
Why commissions don't usually affect recommendations
Most lenders pay broadly similar commission rates, so the differences between lenders are usually small. Combined with the Best Interests Duty and record-keeping requirements, brokers must be able to show why they recommended a particular loan.
What you get for the commission
- Comparison across a wide panel of lenders
- Help understanding schemes and policies
- Application preparation and follow-up
- Coordination with lenders, valuers and conveyancers
- Ongoing loan reviews
- Help with future goals
How to ask your broker about payment
It's perfectly reasonable to ask:
- How are you paid on this loan?
- Do you charge any fees?
- Would you be paid differently if I chose another lender?
- What happens if I refinance in the first two years?
A good broker will answer openly.
A note on value
Using a broker doesn't mean you'll always pay less than going direct. The value comes from choice, guidance and time saved. With four rate rises in 2026 and a lot of change in lending rules, many people find that guidance especially valuable this year.
An example
Jake takes out a $600,000 loan through a broker. He pays no fee to the broker. The lender pays the broker an upfront commission after settlement and a small monthly trail commission. Jake's interest rate is the same as the lender's direct rate. Each year, his broker reviews his loan and, in 2026, helps him negotiate a lower rate after the cash rate rises.
Brokers and ongoing service
Trail commission is one reason good brokers stay in touch after settlement. It gives them a reason to review your rate and help when your needs change.
Frequently asked questions
Do brokers get paid more for recommending certain lenders?
Commission rates are broadly similar, and the Best Interests Duty requires brokers to put your interests first.
Can I see the commission amount?
Yes. Your broker must disclose it.
Will my rate be higher because I used a broker?
Generally no. Lenders usually offer the same rates through brokers as directly.
Is it okay to ask my broker about their commission?
Absolutely. A good broker will happily explain how they're paid.
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.