Quick answer
A mortgage broker is a licensed credit professional who arranges loans secured by residential property, comparing products from a panel of lenders and handling the application. In Australia they must hold an Australian credit licence or act as a credit representative, and they owe home loan borrowers a legal best interests duty. Most are paid commission by the lender, with an upfront payment and an ongoing trail.
Key points
- Arranges home-secured loans from a panel of lenders, not just one
- Must be licensed or a credit representative; you can check on ASIC's registers
- Usually paid by the lender through upfront and trail commission
- Loans for business purposes may fall outside the consumer rules that protect home buyers
For many owners the first person they ring about business money is the broker who did their home loan. That’s a sensible instinct: the broker knows the property, the existing lender and the family’s finances. Whether they’re the right person to finish the job depends on what the money is for.
What a mortgage broker actually does
A mortgage broker sits between you and a panel of lenders. They gather your documents, work out which lenders’ policies fit, compare products and manage the application through to settlement. Most work under an aggregator, a larger firm that holds the lender agreements and supplies the software, which is why two brokers can have quite different panels.
In Australia a broker must hold an Australian credit licence or carry an authorisation as a credit representative of a licensee. You can confirm either number on ASIC’s professional registers in a couple of minutes, and it’s worth doing before you hand over payslips and bank statements.
Most are paid by the lender, not by you: an upfront commission when the loan settles and a smaller trail while it stays on the books. Our guide to how brokers get paid goes into the detail.
Where their help stops for business owners
Since 2021, mortgage brokers have owed home loan clients a legal best interests duty under the National Credit Act, covered in ASIC’s Regulatory Guide 273. That duty is built around consumer credit. When you borrow against your home and the money is mainly for the business, the loan is usually classed as business-purpose credit, and lenders will often ask you to sign a declaration saying so.
Two practical consequences follow. First, the consumer protections you had on your home loan may not carry across to the new borrowing. Second, the broker’s panel may not include the lenders best suited to a business deal: private lenders, second mortgage funders, or cash flow lenders that look at bank statements rather than tax returns. A good broker will tell you when a deal is outside their lane. For a wider view of brokers who do commercial work, see our entry on the general broker.
Example: an Adelaide owner releasing equity
Mei runs a physiotherapy clinic in Adelaide’s eastern suburbs and wants $150k to fit out a second room and buy equipment. Her home is worth about $1.2m with $480k owing. She asks her mortgage broker for help.
The broker first tries a top-up with Mei’s existing home lender. That’s usually the cheapest path, and a bank that says yes is worth taking seriously. The bank declines because last year’s tax return showed a dip while the clinic moved premises. The broker’s panel has no lender that will look past that, so the broker refers Mei to a business finance specialist, who places a second mortgage with a non-bank lender that accepts recent bank statements as evidence of income. Mei keeps her home loan untouched and the business debt sits separately, which also keeps her records clean at tax time.
Already been knocked back on a top-up? Tell us briefly what happened and we’ll look at who lends in that gap.
Questions to ask before you start
- Is this loan being treated as consumer or business credit, and what changes for me?
- Which lenders on your panel lend for business purposes against a home?
- If the bank says no, who do you refer to, and are you paid for that referral?
- Will the new loan be cross-secured with my existing home loan?
On the last point, see cross-collateralisation: linking the two loans can make it harder to refinance or sell later.
Got property, need business funds?
A home loan broker is a great first call, and banks are often the best value when they say yes. When the request is really about the business, it helps to have someone who looks at business lenders every day. Send us a short summary of the property, what you owe and what the money is for. It’s about a minute’s work, our check doesn’t touch your credit history, and nothing is forwarded to a queue of lenders. One of our specialists works through what you’ve sent and rings you. Honest numbers on value, debt and income mean the options we raise on that call are ones you can actually use.
Frequently asked questions
Can a mortgage broker arrange a business loan?
Some can and do, particularly where the loan is secured by a home. Others stick to home loans and refer business deals to a commercial or asset finance specialist. Ask what share of their work is business lending and which business lenders they actually use.
Do I pay a mortgage broker?
For most residential loans the lender pays the broker's commission, so you pay nothing directly. Some brokers charge a fee for complex or commercial work. Any fee should be disclosed in writing before they start.
How do I check a mortgage broker is licensed?
Ask for their Australian credit licence number or credit representative number, then search it on ASIC's professional registers. The register shows who they are authorised by.
Does the best interests duty apply if I borrow against my home for my business?
Generally the duty is aimed at consumer credit, meaning loans for personal or household purposes or residential investment. If the money is mainly for business, the loan is usually treated as business-purpose credit, so those consumer protections may not apply. Ask the broker to explain how your loan will be classified.
What is the difference between a mortgage broker and a finance broker?
A mortgage broker focuses on loans secured by residential property. A finance or commercial broker covers business products such as equipment finance, invoice finance and unsecured business loans. Plenty of brokers do both.