Last updated: August 19, 2026
The short answer
For most refinancing scenarios in 2026, a mortgage broker gives you better rates, more options, and a legal duty to act in your best interests that bank lenders do not have. Brokers work across the whole market (typically 40 to 60-plus lenders) and are legally bound by the Best Interests Duty introduced after the 2018 Banking Royal Commission. Banks work with one product shelf, their own, and are held to lower conduct standards. That said, there are specific situations where going direct to your existing bank is actually the right move: negotiating your current rate down, small top-ups, and cases where you’re loyal to a specific lender for reasons beyond price. This post walks through all of it, honestly.
Want a straight read on your specific situation? Book a free 15-minute call and we’ll tell you which path makes sense.
What’s actually different between a mortgage broker and a bank?
A mortgage broker is an intermediary between you and lenders. Brokers don’t lend money; they compare loan products across a panel of lenders, recommend the one that best suits your situation, and manage the application process. They’re paid a commission by the lender that settles your loan, not by you.
A bank (going direct) is the lender. When you walk into a branch or call your bank’s home loan team, you’re speaking to an employee of that specific bank. They can only offer you that bank’s products. They’re paid by the bank.
Both paths result in a home loan. But the choice, cost, service, and legal duties involved are different. And in 2026 those differences matter more than they used to, because of what happened after the Royal Commission.
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The most important difference: Best Interests Duty
Since 1 January 2021, mortgage brokers in Australia have been legally required to act in the best interests of their clients. This is called the Best Interests Duty (BID), and it’s set out in the National Consumer Credit Protection Act. It was introduced following Recommendation 1.2 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which concluded in 2019.
Under BID, a broker must:
- Act in the best interests of the client (not the lender, not themselves)
- Consider the client’s individual circumstances
- Compare products across a reasonable range of lenders
- Resolve any conflict of interest in favour of the client
Bank lenders (the staff who deal with you when you go direct) are NOT held to this duty. They have general obligations under consumer credit law, but the specific duty to act in your best interests applies only to brokers, not to lenders. This is a fundamental structural difference in how the two channels are regulated, and it exists because the Royal Commission found systemic issues with the way direct lender channels had operated.
Broker vs bank at a glance
| Mortgage broker | Going direct to bank | |
|---|---|---|
| Number of lenders | 40 to 60-plus lenders (varies by broker) | 1 lender (that bank) |
| Cost to you | Free (paid by lender on settlement) | Free |
| Legal duty to act in your best interests | Yes (Best Interests Duty) | No |
| Regulator oversight | ASIC + MFAA + aggregator | ASIC only |
| Time investment (you) | Low (broker manages process) | High (you manage it) |
| Access to specialist lenders | Yes (self-employed, low-doc, credit-impaired) | No (only mainstream lending) |
| Rate access | New-customer promotional rates across many lenders | Existing-customer rates (often higher) |
| Application handling | Broker packages and lodges | You handle it yourself |
| Post-settlement service | Broker often reviews annually | Bank rarely reviews proactively |
How each of them gets paid
This is where a lot of the confusion sits, and it’s worth working through carefully because it goes to the heart of any conflict of interest concern.
How a mortgage broker gets paid
A broker is paid an upfront commission by the lender that settles your loan, plus a small ongoing trail commission for as long as the loan stays with that lender. Typical upfront commission is 0.60% to 0.70% of the loan amount, paid on settlement. Trail commission is typically 0.15% to 0.20% per year of the outstanding balance.
Two things to understand about broker commission:
- You don’t pay it. The commission comes out of the lender’s margin, not out of your loan. Your rate is the same whether you go through a broker or direct.
- Commission rates are largely standardised. Under the Combined Industry Forum reforms, upfront commission rates are similar across mainstream lenders, which limits the incentive for a broker to recommend one lender over another based on their own payout. The Best Interests Duty is the legal backstop; standardised commissions are the structural backstop.
How a bank home lender gets paid
A bank home lender (whether at a branch, in a call centre, or a mobile lender who visits you) is an employee of the bank. They receive a salary and may have bonus structures tied to volume, product mix, or customer retention targets. Their loyalty and legal duty is to the bank, not to you.
This isn’t a moral criticism; it’s just structurally what employment looks like. It’s the same reason your accountant works for you and the ATO’s staff don’t. It matters because it shapes the advice you get.
What about the rate itself?
This is where the practical difference shows up most sharply. Banks operate a two-tier pricing structure: promotional rates for new customers, and higher rates for existing customers. It’s not always explicit, but it’s baked into how their pricing calculators work.
If you’re an existing customer looking to renegotiate, your bank will typically offer a discount off their standard variable rate, but that discount is smaller than what they’d offer a brand new customer. This is called the ‘loyalty tax’ and it’s been well documented in Reserve Bank of Australia (RBA) research.
A broker accesses new-customer promotional rates across every lender on their panel. In practical terms, this often means a 0.2% to 0.5% difference between what you’d get renegotiating with your existing bank versus what you’d get refinancing to a different lender through a broker.
Rate access: broker vs bank
| Scenario | Broker access | Direct-to-bank access |
|---|---|---|
| New customer promotional rates | Yes, across every lender on panel | Yes, at that one lender |
| Existing customer negotiation | Yes (if refinancing internally) | Yes (loyalty-tax rates) |
| Best-in-market rate benchmarking | Automatic, across whole panel | You have to do it manually |
| Specialist lender rates | Yes (broader panel) | No |
| Cashback offers | Access to whichever lender is currently offering | Only that bank's cashback (if any) |
When a bank is actually the better choice
There are specific situations where going direct to your existing bank is the right first move. Being honest about these is important because they’re real.
Situation 1: You just want to renegotiate your current rate
If you’re happy with your current lender, don’t want to move, and just want a better rate on your existing loan, call your lender’s retention team directly. Ask for a rate review. Have a couple of comparable market rates ready (a broker can often provide these informally). Retention teams have discretion to reduce your rate to keep you, and this is the fastest path to a lower rate. It’s not a refinance, it’s a renegotiation. A broker isn’t involved because there’s no new loan to settle.
Situation 2: You have a long-established relationship and business banking mixed in
If your home loan, business banking, credit cards, and personal accounts are all with the same institution and you value that consolidation, moving your home loan can be a significant operational upheaval. Sometimes the rate saving isn’t worth the disruption. Speak to your bank first about their best rate for a valued relationship customer.
When a broker is the better choice
Situations where a broker almost always outperforms going direct:
- Any new home purchase (owner-occupier or investment). The pre-approval race and rate optimisation on a purchase are strongly in the broker’s favour.
- Refinancing to a different lender. The whole point is comparison across the market. Impossible to do properly without a broker.
- Self-employed borrowers. Different lenders have very different appetites for self-employed income assessment. Some make it easy, some make it hard. A broker knows which is which.
- Complex serviceability situations. Existing debts, multiple properties, HECS, family trusts. Lender serviceability calculators vary by 20% or more on the same input. A broker knows which lender will approve you.
- First home buyers. The FHOG, stamp duty, First Home Guarantee schemes stack differently at different lenders. Some lenders are better at first home buyer packaging than others.
- Investment property purchases with existing property equity. Loan structure (see our guide to using equity to buy an investment property) matters as much as rate. A broker builds the structure.
- Refinancing to release equity. Full market comparison is important because equity releases have long-term rate implications.
- Cases where your current bank has said no. A different lender may say yes. Only a broker gets you in front of them.
Scenario-by-scenario: which channel wins?
| Your situation | Broker | Bank direct | Winner |
|---|---|---|---|
| Refinance to different lender for lower rate | Full market comparison | Not possible | Broker |
| Rate negotiation with current lender only | Can help informally | Direct call to retention team | Bank (direct) |
| New home purchase | Pre-approval across lenders | One lender only | Broker |
| Self-employed home loan | Panel with strong self-employed lenders | One lender's policy only | Broker |
| First home buyer | Scheme stacking across lenders | One lender's scheme handling | Broker |
| Investment property with equity release | Structure + rate + panel | One lender only | Broker |
| Existing customer, complex banking relationship | Can help if you want to move | Preserves existing relationship | Depends |
Common misconceptions
Misconception 1: ‘Brokers charge fees, banks are free’
False. Both are free to you. Brokers are paid by the lender on settlement. Bank staff are paid by the bank. The commission structure does not increase your rate.
Misconception 2: ‘Brokers only recommend the lender that pays them the most’
This is the concern the Best Interests Duty was designed to address. Broker commission rates are largely standardised across mainstream lenders, and any material variation between lender payments must be disclosed. Under BID, the legal test is whether the recommendation is in your best interests, not whether it maximises the broker’s commission.
Misconception 3: ‘Banks give you better rates because they don’t pay a broker commission’
False. Bank pricing is not lower to broker-introduced customers versus direct customers. The commission is paid out of the lender’s margin regardless. In practice, the rate you get through a broker for a specific lender is typically identical to (or better than) what you’d get going direct, because the broker packages the application in a way that fits the lender’s preferred profile.
Misconception 4: ‘Brokers only work with second-tier lenders’
False. All the major banks (Big Four plus the regional majors) work through the broker channel. Brokers also access second-tier and specialist lenders that don’t have retail branches, which is often exactly the point.
What SCFS specifically brings
Sunshine Coast Financial Solutions is a mortgage broking firm based in Sippy Downs, on the Sunshine Coast. We’re MFAA accredited and Connective aggregated, work with 60+ lenders, and are legally required to act in your best interests under the Best Interests Duty.
What we bring specifically:
- 15 years of local Sunshine Coast experience
- More than 750 five-star Google reviews
- A team that includes dedicated settlements and post-settlement leads (so nothing falls through the cracks)
- Annual loan reviews so your rate stays competitive as the market changes
- Free 15-minute Home Loan Health Check for anyone weighing up their options
Ready to see what’s actually available for you?
Book a free 15-minute Home Loan Health Check. We’ll look at what you have, compare it against what’s actually available across the market in 2026, and give you the honest answer on whether refinancing (through us or renegotiating with your existing bank) is worth it. No hard sell, no pressure.
Or call us on 07 5437 9073 during business hours. Our office is at 18/8 Fairfax Street, Sippy Downs, and we work with clients across the Sunshine Coast.
Frequently Asked Questions
For most scenarios, yes. Brokers give you access to 40 to 60-plus lenders, they’re legally bound by the Best Interests Duty (banks are not), and the service is free to you. Exceptions include renegotiating your existing rate with your current lender and small top-ups on your existing loan, where going direct is often faster.
No. Mortgage brokers are paid a commission by the lender on settlement. The commission does not affect your interest rate. The service is free to you.
A legal obligation, introduced 1 January 2021, requiring mortgage brokers to act in the best interests of their clients. It’s set out in the National Consumer Credit Protection Act and enforced by ASIC. It was introduced following Recommendation 1.2 of the 2018-2019 Banking Royal Commission. Bank lender staff are not held to this duty when dealing with you directly.
Often yes, but not because the broker channel is priced differently. It’s because a broker benchmarks across the whole market and accesses new-customer promotional rates at multiple lenders. If your existing bank is 0.2% above the market’s best, going through a broker to refinance to a different lender captures that difference. Renegotiating with your existing bank often gets you a smaller reduction than a full refinance would.
Yes. Many borrowers get a rate quote from their existing bank first, then compare it against what a broker can find. Two things to watch: don’t have multiple lenders pull your credit file in the same month, because it hurts your credit score; and be honest with the broker about which lender you’re currently speaking with, so they can benchmark properly.
Both channels lend money that’s regulated by ASIC and (for authorised deposit-taking institutions) APRA. The loan itself is with a lender either way; the broker is the intermediary. In terms of your consumer protections, the Best Interests Duty actually makes the broker channel more legally protective than going direct to a bank.
Familiarity, existing relationship, simplicity if they only want to renegotiate their current rate, and comfort with the brand. These are all legitimate. The trade-off is that going direct means one lender only, no market benchmark, and no Best Interests Duty.
Look for MFAA membership (a professional standards body), Connective or similar aggregator accreditation, a strong review track record (look at Google reviews specifically), local presence and tenure, and a proper conversation about your situation before any product recommendation. Any broker worth working with will offer an initial call for free.
Yes. Bring us your current bank’s offer (or a screenshot of what they’ve said), and we’ll compare it against the market across our panel of 40+ lenders. If your bank’s offer is genuinely competitive, we’ll tell you. If it’s not, we’ll show you what else is available.
Meet Chris Wilson, the heart of Sunshine Coast Financial Solutions (SCFS). With over a decade of experience in finance, Chris started his journey as a broker with Aussie Home Loans in 2009. His dedication earned him the title of Rookie of the Year in 2010. By 2011, he was ready to build a business based on trust and strong partnerships.
