What a broker actually does that a bank branch won’t

Walk into a bank branch and the person you speak to can offer you one thing: that bank’s products. They may be helpful and knowledgeable, but they can’t tell you that the lender across the road would approve you for more, or charge you less.

A broker works differently. Here’s what that means in practice.

1. They compare across lenders

A broker has access to a panel of lenders, including major banks, smaller banks and specialist lenders. They compare rates, fees and features for your situation, not just the headline rate on a website.

2. They know who says yes

Lenders have very different policies. One might treat overtime or a second job generously, while another ignores it. One might accept a two-year-old ABN, another wants three years. Brokers deal with these policies every day and can steer your application to a lender likely to approve it, which also avoids unnecessary credit enquiries on your file.

3. They do the paperwork

From collecting documents to chasing valuations and liaising with your conveyancer, a broker manages the process so you are not stuck on hold.

4. They have to act in your best interests

Mortgage brokers in Australia must meet a best interests duty when giving credit assistance for home loans. That means the loan they recommend must be in your best interests, and they must prioritise your interests where there is a conflict.

5. They are usually free for you

Most brokers are paid a commission by the lender when the loan settles, and referral services like ours may receive a referral fee from the broker. They must disclose how they are paid, and some may charge a fee in certain cases. If they do, they must tell you up front.

The bottom line: a bank branch can be a good option if you already know it offers the best deal for you. A broker helps you find out whether that is actually true.

This article is general information only and does not take into account your objectives, financial situation or needs. Speak to your broker, and your accountant where tax is involved, before making a decision.