Did you know that mortgage brokers MUST work in your best interests? We are legally bound to do so! Many people are surprised to learn that this legal duty does not apply to banks! So, when you speak to a mortgage broker you know we have a best interest duty to ensure you get the best possible mortgage for your personal circumstances.
What is the best interests duty mortgage brokers?
The best interests duty that applies to mortgage brokers when they work with you is a statutory obligation for us to work in the best interests of consumers (that’s you) and to prioritise your interests when providing you with credit assistance (this comes under our conflict policy rule).
Together, these two obligations are referred to as the Best Interests Duty. It was put in place to ensure that the consumer’s expectations and interests are aligned with the interest of the mortgage broker helping you with your home loan finance.
How does the best interest duty for mortgage brokers apply to home buyers?
How exactly do we work in your best interests? The industry regulator, Australian Securities and Investments Commission (ASIC) informs us that assessing the best interests of the consumer is done by:
- Considering the cost of a product. This includes the interest rate, fees and charges, and repayment amounts you would be required to pay on your home loan.
- Non-cost considerations. This includes assessing whether loan features will realistically offer you good value or a net benefit when compared to other loan options.
These guidelines mean we take the time to understand your personal circumstances, your finances and your ability to repay a home loan as well as your lifestyle goals. We then match you with a lender and home loan product that ticks all the right boxes for your situation.
A great service we also offer is ensuring your home loan is working for you into the future. We help you understand if you still have the best interest rate and the right loan features for where you are in life. If needed, we can help you negotiate with your lender to offer you a better loan deal, or, help you refinance with a new lender.
What does the Best Interests Duty mean for you as a customer?
All qualified mortgage brokers operate under this best interest duty. This means when you work with an experienced mortgage broker, you can be confident that you have peace of mind that we will work to get you the right home loan for you.
Unfortunately, not everyone knows this best interests duty does not apply to banks. There is no legal requirement for a bank to work in your best interest when you approach them directly. They don’t have to legally assess your circumstances and ensure they are giving you the best option for you. They certainly don’t have to tell you if another lender would be better for you.
As mortgage brokers, we legally have to assess your finances and act in your best interests when we recommend a home loan option to you. We have a large panel of lenders available in order to make this match happen for you.
If you need a home loan, contact us to find out exactly how we can help you find the best mortgage for you.