Choosing a broker

Mortgage broker fees and commissions in Australia

Understand who usually pays a mortgage broker, how upfront and trail commissions work, when a borrower fee may apply, and what to ask before proceeding.

Updated: 4 August 2026
Read time: 8 min read
Reviewed by: emoney broker team

Key checks before you decide

Reviewed by emoney broker team. Updated 4 August 2026. Sources are listed below.

Ask who pays the broker and whether the amount differs between lenders.
Confirm every direct borrower fee in writing before agreeing to the service.
Check which lenders are inside and outside the broker's panel.
Compare loan cost, features and policy fit instead of treating the broker fee as the whole decision.

In this guide7 sections

Start with the usual payment model Understand upfront and trail commission Check whether a borrower fee applies Ask how conflicts are managed Know what a clawback means Compare the whole loan cost Leave the first meeting with written answers

Start with the usual payment model

Lenders generally pay mortgage brokers a commission for distributing their home loans. MoneySmart says this commonly includes an upfront payment and an ongoing payment, while brokers must provide information about commissions they may receive.

That does not make the service costless in an economic sense. Commission forms part of the distribution model around the loan, so the borrower should understand how the broker is paid and how the proposed loan compares on rate, fees, features and total cost.

The payment model can also vary between broker businesses and lender agreements. Avoid assuming that every broker is free, that every lender pays the same amount, or that a broker has access to the whole market. Ask for the facts that apply to the broker and the proposed loan.

Payment	Who commonly pays	What to ask
Upfront commission	The lender after settlement	How is it calculated and disclosed?
Trail commission	The lender while the loan remains in place	When does it start and what can change it?
Borrower fee	The borrower where the broker charges one	When is it payable and what service does it cover?
Clawback	Usually a commercial recovery from the broker or aggregator	Could it affect any separate fee or later conversation?

Understand upfront and trail commission

An upfront commission is generally connected with a loan settling. Trail commission is an ongoing payment connected with the loan balance or the period the loan remains in place. The exact calculation belongs in the broker's current disclosure, not in a generic percentage quoted online.

Borrowers do not need to become remuneration specialists, but they should know that two payment streams can exist. Ask whether the amounts differ between the shortlisted lenders and how the broker kept the recommendation focused on the borrower's best interests.

A transparent broker should be able to explain the commercial arrangement without turning the answer into a sales defence. The useful explanation covers who pays, what triggers payment, what may continue over time and where the borrower can read the written disclosure.

Ask for the current disclosure rather than relying on an old website percentage.
Ask whether remuneration differs across the proposed lender options.
Ask how the shortlist was formed before pricing was compared.
Keep a copy of the documents provided before the application.

Watch out

Check whether a borrower fee applies

Some brokers may charge a borrower directly. MoneySmart says a proposed fee should be communicated clearly and set out in a written quote, which the borrower signs before the broker provides the relevant services and requests payment.

A direct fee may relate to a particular service model or type of work. The borrower should ask what the fee covers, when it becomes payable, whether any part is refundable, and whether lender-paid commission is also received for the same matter.

Do not rely on a verbal statement such as 'there might be a fee later'. The written explanation should let the borrower compare like with like across brokers and understand what happens if the application does not proceed or the borrower changes direction.

What exact service does the fee cover?
When does the fee become payable?
Could another fee apply if the loan does not settle?
Will the broker also receive lender-paid commission?

Broker note

Ask how conflicts are managed

Mortgage brokers must act in a consumer's best interests when providing relevant credit assistance. Remuneration still deserves a direct conversation because lender access, payment differences, ownership and incentives can affect how a comparison is understood.

Ask the broker to explain why each shortlisted option was included, which alternatives were ruled out and what borrower information drove the comparison. A useful answer links the options to cost, features, lender policy, documents, timing and the borrower's stated priorities.

The best interests duty does not mean every broker compares every lender in Australia. Panel scope and accreditation still matter. The borrower should be able to see the boundaries of the comparison before treating it as a view of the whole market.

Which lenders did you consider for my situation?
Which lenders could you not access?
Did any shortlisted lenders pay differently?
Why is the proposed option in my best interests?

Know what a clawback means

A clawback is a commercial arrangement that may require commission to be repaid if a loan ends or changes within a specified period. It is not automatically a fee charged to the borrower, and the borrower should not assume that one broker's arrangement applies everywhere.

Clawback rules have changed over time and can differ across agreements. The practical borrower question is whether the broker charges any separate fee connected with early repayment, refinance or discharge, and where that term is disclosed before the service begins.

A broker should not pressure a borrower to keep an unsuitable loan merely because remuneration may be affected. If the loan no longer fits, the review should return to the borrower's circumstances, current costs, lender options and any consequences of changing.

Ask whether early refinance changes any fee payable by you.
Read the written terms before engaging the broker.
Separate the broker's commercial arrangement from your loan decision.
Request a fresh review if the loan stops fitting your needs.

Next step

Want a broker to check this against your situation?

Share the loan goal, timing and a few key details. An emoney broker can then pick up the enquiry with the relevant context.Ask an emoney broker about costs

Example

Compare the whole loan cost

A zero-dollar borrower fee does not prove that a loan is cheaper, and a direct broker fee does not prove that the service is poor value. Compare the interest rate, comparison rate, lender fees, package costs, features, loan term and likely use of the loan together.

A lower repayment can come from a longer term rather than a lower total cost. An offset package can be useful for one borrower and wasteful for another. A fast approval process can matter during a purchase, while ongoing review and communication may matter more for an existing borrower.

Put the broker's remuneration beside these factors rather than above them. The useful outcome is a clear record of what was compared, what the borrower pays, what the lender pays and which assumptions could change the result.

Compare the same loan amount, term and repayment type.
Include establishment, package, valuation and discharge costs where relevant.
Check how features would actually be used.
Ask what happens after settlement and during future reviews.

Leave the first meeting with written answers

The first broker meeting should produce more than a rate discussion. Ask for the service scope, lender-panel explanation, remuneration disclosure, any fee quote, privacy process and the next document step in a form you can review later.

If an answer is unclear, pause before supplying sensitive documents or agreeing to proceed. A credible process gives the borrower room to ask questions and compare another broker without manufacturing urgency.

If a dispute cannot be resolved with the broker or business, MoneySmart describes a written complaint process and identifies the Australian Financial Complaints Authority as the external dispute-resolution route. Keep the relevant documents and communication history.

Written service scope and any direct fee quote.
Commission and lender-panel disclosure.
Explanation of the options considered.
Secure document and complaint process.

Sources used

Using a mortgage broker
ASIC MoneySmartofficial sourceChecked 4 August 2026
RG 273 Mortgage brokers: Best interests duty
ASICofficial sourceChecked 4 August 2026
ASIC review of mortgage broker remuneration
Australian Treasuryofficial sourceChecked 4 August 2026
Choosing a home loan
ASIC MoneySmartofficial sourceChecked 4 August 2026
Make a complaint
Australian Financial Complaints Authorityofficial sourceChecked 4 August 2026

General information only

This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.

Before you choose

Compare the support, costs and limits clearly.

Share what you are weighing up. A broker can explain the process, costs and questions that apply to your situation.

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