- Level 2
1/3 Janefield Dr
Bundoora VIC 3083 - Monday to Friday
8:30 AM – 6:00 PM - Call Us Now
1300 188 808
Before working with a mortgage broker, most people have questions they’re hesitant to ask, about cost, about being declined, about what happens if their situation is complicated. These are the questions we get asked most often at Blutin Finance, answered honestly. If you don’t find what you’re looking for, give us a call.
Common questions about what mortgage brokers do, how they’re regulated, and when it makes sense to use one.
A mortgage broker is a licensed finance professional who works on behalf of the borrower, not the lender, to find and arrange a home loan. The broker’s job is to assess your financial situation, compare loan products across multiple lenders, submit your application, negotiate terms where possible, and manage the process through to settlement. In Australia, mortgage brokers must hold an Australian Credit Licence (ACL) or operate as a Credit Representative under one, and are regulated by ASIC. Since 1 January 2021, Australian brokers have also been bound by the Best Interests Duty; a legal obligation to recommend the loan that suits you, not the one that pays the most commission.
According to the Mortgage and Finance Association of Australia (MFAA), 76% of Australian home loan borrowers now use a mortgage broker and that share is growing every year. The three main reasons: broader choice (brokers access 45+ lenders versus one bank’s products), tailored assessment (brokers match your situation to the lender most likely to approve), and time savings (one application, multiple lender options). The shift has been driven partly by the 2019 Banking Royal Commission, which highlighted bank conflicts of interest, and partly by the 2021 introduction of the Best Interests Duty, which gave borrowers a legal protection when using brokers that doesn’t apply when going direct to a bank.
There are situations where going directly to a lender may make sense. If you have a strong, long-standing banking relationship and your bank has offered you a competitive rate on a straightforward loan, a broker may not add significant value. If you’re transferring an existing mortgage product within the same lender (an internal refinance or product switch), you typically don’t need a broker. Some lenders, including certain smaller or online-only lenders also don’t work with brokers, so you’d need to approach them directly. However, for most Australians with standard circumstances, the broker comparison process still reveals better options than a single bank can offer.
The Best Interests Duty is a legal obligation introduced on 1 January 2021 under the National Consumer Credit Protection Act. It requires Australian mortgage brokers to act in the best interests of the borrower when providing credit assistance, and to prioritise the borrower’s interests over the broker’s own financial interests. In practice, this means your broker must consider loan features that benefit you, your ability to afford repayments, your likelihood of approval, and the overall cost of the loan compared to alternatives, regardless of which lender pays the highest commission. Banks and their staff are not subject to the Best Interests Duty when recommending their own products. If a broker breaches this duty, ASIC can impose penalties including fines and licence suspension.
How mortgage brokers are paid in Australia, what it costs you, and why commission doesn’t mean bias.
For standard residential home loans in Australia, the lender pays the broker, not you. The lender pays an upfront commission when your loan settles (typically 0.35% to 0.70% of the loan amount according to the MFAA), plus a smaller ongoing trail commission for as long as the loan remains active. This is a standard industry practice, disclosed to ASIC, and built into the lender’s cost structure. It means you pay the same amount whether you use a broker or walk into a bank branch, going direct doesn’t save you money. At Blutin Finance, we charge no fees to clients for our home loan services.
On a $500,000 home loan, the broker’s upfront commission from the lender is typically between $1,750 and $3,500 or roughly 0.35% to 0.70% of the loan amount, according to figures published by the MFAA. The broker also receives an ongoing trail commission of around 0.15% to 0.20% per year for as long as the loan remains active. Commission rates are broadly similar across lenders, which is a deliberate feature of the industry, it removes the financial incentive for brokers to favour one lender over another. All commission amounts are fully disclosed in your credit guide and credit disclosure document (CPD) before you sign anything.
This is a fair question and it was the focus of the 2019 Banking Royal Commission. The answer in 2026 is that the Australian mortgage broking industry is now structured to prevent commission bias in three ways. First, commission rates are broadly similar across lenders (typically 0.35–0.70% upfront), meaning there’s no significant financial upside to pushing one lender over another. Second, since 1 January 2021, the Best Interests Duty legally requires brokers to recommend what suits your situation, not what pays most. Third, all commissions must be disclosed in writing before you commit to a loan. That said, the best protection is choosing a broker with a wide lender panel (45+ lenders) who can demonstrate they’re recommending based on fit, not commission.
No. In almost all cases, using a mortgage broker costs you nothing directly, and the interest rate and fees you’re offered are the same as, or better than, what you’d get walking into a bank branch. Many Australian lenders operate a “channel neutrality” policy, meaning they can’t offer a better rate directly to walk-in customers than they offer through brokers. Brokers can often secure discounts on the advertised rate because of their ongoing relationship with the lender and the volume they represent. The Moneysmart government website confirms that mortgage brokers in Australia are typically paid by the lender, not the borrower.
Common questions about borrowing capacity, deposit requirements, and what to do if you’ve been declined before.
Yes. In many cases, being declined by one bank does not mean you can’t get a home loan. Each Australian lender has its own credit policy, and a decline from one lender doesn’t automatically mean decline from another. Non-bank lenders like Bluestone, Pepper Money, La Trobe Financial, and Resimac often approve applications that major banks reject, because they assess borrowers on different criteria. A mortgage broker with access to specialist lenders can review your situation and identify lenders most likely to approve. At Blutin Finance, we regularly work with borrowers who’ve been declined elsewhere, it’s one of the main reasons people come to us.
Yes. Self-employed Australians can absolutely get a home loan but the process is different from PAYG employees. Standard lenders typically require two years of tax returns and financial statements to verify income, which can be challenging for newer businesses or borrowers with variable income. Fortunately, Australia has a range of specialist lenders (including Pepper Money, La Trobe Financial, RedZed, and Bluestone) who offer low-doc and alt-doc home loans, assessing income through BAS statements, accountant’s declarations, or bank statements rather than full tax returns. The key is matching you to a lender whose income assessment policy fits your business structure.
The minimum deposit to buy a home in Melbourne is 5% of the purchase price, available through the Australian Government’s First Home Guarantee scheme (formerly called the First Home Loan Deposit Scheme). Under this scheme, the government acts as guarantor for up to 15% of the purchase price, meaning you don’t pay Lenders Mortgage Insurance (LMI) despite having less than 20% deposit. Since 1 October 2025, the scheme has been significantly expanded, there are no place limits, no income caps, and the Victorian property price cap (covering Melbourne and Geelong) is now $950,000. Single parents and legal guardians can access the Family Home Guarantee with just 2% deposit. Without a government scheme, most Australian lenders require a minimum of 5-10% deposit plus LMI, though 20% remains the standard to avoid LMI altogether.
Four practical steps increase your borrowing capacity under Australian lender assessments. First, reduce or close unused credit card limits; lenders assess your capacity based on the full limit available, not your balance. Second, pay down or consolidate existing debts like personal loans, car loans, and BNPL accounts. Third, minimise discretionary spending in the three months before applying, as lenders review your bank statements during assessment. Fourth, ensure stable employment; most lenders prefer six months in your current job or two years self-employed. Small changes here can increase your borrowing capacity by tens of thousands of dollars.
Several paths allow Australian borrowers to avoid LMI without a 20% deposit. The First Home Guarantee scheme allows eligible first home buyers to purchase with just 5% deposit and no LMI, with the Australian government acting as guarantor. The Family Home Guarantee allows single parents to purchase with 2% deposit. A guarantor home loan, where a family member uses equity in their property as additional security, can also eliminate LMI entirely. Some professions (medical professionals, accountants, lawyers) qualify for professional home loan packages with lenders like Macquarie and ANZ that waive LMI with a 10% deposit. Your eligibility depends on income, property price, and lender policy.
Yes, bad credit doesn’t automatically disqualify you from getting a home loan in Australia, though it narrows your options and typically increases the interest rate. Major banks (CBA, Westpac, ANZ, NAB) usually require a clean credit history with no defaults, late payments, or bankruptcy. However, specialist non-bank lenders including Pepper Money, Bluestone, La Trobe Financial, and RedZed assess bad credit applications on a case-by-case basis, often approving borrowers with past defaults, discharged bankruptcies, or thin credit files. The tradeoff is typically a higher interest rate, though many borrowers refinance to a prime lender after 12-24 months of good repayment history.
What to expect from your first appointment through to settlement, and how long each stage takes.
For a straightforward residential home loan application in Australia, conditional approval (also called pre-approval) typically takes 2-5 business days once all your documents are submitted. Full unconditional approval after you’ve found a property usually takes another 2-10 business days, depending on the lender and how quickly the property valuation is completed. Settlement then occurs on the date specified in your contract of sale, typically 30 to 90 days after exchange. Complex applications (self-employed, low-doc, specialist lenders) may take longer. At Blutin Finance, we manage the process end-to-end and keep you updated at every stage so you’re never in the dark about where your application stands.
To make your first appointment productive, bring documents that verify your identity, income, savings, and existing commitments. Specifically: photo ID (driver’s licence or passport), your last 2-3 payslips (or 2 years of tax returns and financial statements if self-employed), 3 months of bank statements for all accounts, statements for any existing loans or credit cards, and a general idea of your property goals and budget. If you don’t have everything ready, that’s fine, we can start the initial conversation and request documents as needed. The more detail you bring, the more accurate our borrowing capacity assessment will be.
For a standard Australian home loan application, you’ll need four categories of documents. First, identity: driver’s licence, passport, or Medicare card (typically two forms of ID). Second, income: 2-3 recent payslips plus a year-to-date payment summary for PAYG employees, or 2 years of personal and business tax returns plus Notices of Assessment for self-employed borrowers. Third, expenses and liabilities: 3-6 months of bank statements, credit card statements, and statements for any existing loans. Fourth, property and deposit: contract of sale (once you’ve found a property) and evidence of your deposit (savings history or gift letter if provided by family). Your broker will give you a specific document checklist based on which lender suits your situation.
Once your application is submitted, five main stages follow. First, initial assessment; the lender reviews your application, documents, and credit history (typically 2-3 business days). Second, valuation; the lender or the mortgage broker orders an independent valuation of the property to confirm its market value (3-7 days depending on the valuer). Third, unconditional approval; once the valuation is satisfactory and all conditions are met, the lender issues unconditional approval. Fourth, loan documents; the lender sends loan contracts for you to sign, usually within 1-3 days of unconditional approval. Fifth, settlement; on the agreed settlement date, funds are transferred and the property title is registered in your name. Your broker coordinates each stage and keeps you informed throughout.
Yes, and it’s strongly recommended. Pre-approval (also called conditional approval) is a lender’s indication that they would approve a loan up to a specific amount, subject to finding a suitable property. It typically lasts 3-6 months depending on the lender. Having pre-approval gives you three advantages when house hunting: you know your exact budget and can avoid wasting time on properties outside your range, you can bid with confidence at auction knowing your finance is in place, and sellers take your offer more seriously than buyers without pre-approval. Pre-approval does involve a credit check, so you shouldn’t apply with multiple lenders simultaneously, this is where a broker adds value by targeting the right lender first time.
What happens after your loan settles, and how a good broker continues to work for you over the life of your loan.
A good mortgage broker continues to help you long after settlement, though not all brokers do. In Australia, brokers receive an ongoing trail commission from the lender for as long as your loan remains active, which means you’re entitled to ongoing service. At Blutin Finance, we review your loan annually to make sure your rate remains competitive, alert you when market conditions change, and are your single point of contact if you need to refinance, restructure, or buy another property. This long-term relationship is one of the key reasons to choose a boutique broker over a franchise or bank, where staff turnover often means you lose your relationship after settlement.
Most Australian borrowers should review their home loan every 1-2 years, even if they don’t end up refinancing. The mortgage market is competitive, and lenders frequently offer better rates to new customers than existing ones, a practice sometimes called the “loyalty tax.” A rate difference of just 0.5% on a $500,000 loan over 30 years can save you more than $50,000 in interest. Good times to review include when your fixed rate period ends, when the RBA makes significant cash rate changes, when your property value has increased meaningfully, or when your financial situation has improved. Your broker can compare your current loan against current market offers without committing you to refinance.
Refinancing costs in Australia typically range from $800 to $1,500 in lender and government fees, depending on your existing loan and the new lender you’re switching to. These costs may include a discharge fee from your current lender (usually $150-$400), mortgage registration and deregistration fees charged by the state government ($150-$300 total), and a new lender’s application or settlement fee ($0-$600, though many lenders waive this for refinancers). A mortgage broker can often negotiate fee waivers and cashback offers (some lenders offer $2,000-$4,000 cashback for refinancers in 2026) that significantly offset or even exceed the switching costs. If the new rate saves you more than the total cost within 12-18 months, refinancing is typically worth it.
A good broker makes buying your next property significantly easier because they already know your full financial history, existing loan structure, and property goals. For your second purchase whether upgrading, downsizing, or buying an investment property, we assess your current equity, review your borrowing capacity with updated income and liabilities, and advise on loan structure for tax efficiency if you’re investing. Many Australian property investors build portfolios using equity from their existing properties rather than cash deposits. At Blutin Finance, a significant portion of our clients come back to us for their second, third, and fourth properties because the relationship and context we’ve built makes each subsequent purchase faster and smoother.