Most people want to know one thing before they speak to a broker: what will it cost me? Mortgage broker fees are usually lower than people expect, because for most standard home loans the lender pays the broker, not you. This guide explains how that works, the typical amounts, and the fees you should still ask about.
New to brokers? Start with what is a home loan broker, or see how they compare in home loan broker vs bank.
How Do Mortgage Brokers Get Paid?
Brokers are usually paid in two ways by the lender:
- Upfront commission: paid when your loan settles. It is commonly a percentage of the loan amount, and the exact rate varies by lender.
- Trail commission: a smaller ongoing payment, typically made while the loan stays with that lender and is still open.
These payments are built into the lender's pricing. You do not receive a separate bill from the broker for a standard loan.
Example: What a Commission Might Look Like
This is an illustration only. Rates differ between lenders and products.
| Item | Illustrative figure |
|---|---|
| Loan amount | $600,000 |
| Upfront commission (example 0.65%) | $3,900 paid by the lender at settlement |
| Trail commission (example 0.17% a year) | About $1,020 a year paid by the lender |
| Broker fee charged to you | Usually $0 for a standard loan, but ask |
Figures are examples only and do not represent any specific lender or broker.
Do Mortgage Brokers Charge Fees to the Borrower?
Many do not charge borrowers anything for a standard residential loan. Some brokers do charge a fee, for example for complex scenarios, large amounts of work, or if you do not proceed after significant effort. Where a fee applies, your broker must explain it in writing before they provide credit assistance, in their Credit Guide and quote.
Fees You May Still Pay on a Home Loan
Even when the broker is free, the loan itself can have costs. These come from the lender or government, not the broker:
- Application or establishment fees
- Valuation fees
- Ongoing account or package fees
- Discharge fees when you leave a loan
- Lenders mortgage insurance if your deposit is small
- Government charges such as stamp duty and registration fees
When comparing loans, look at the total cost, not only the interest rate. Our free calculators can help you estimate repayments.
What Is Commission Clawback?
If you repay or refinance a loan soon after settlement, the lender may take back some or all of the commission from the broker. This is called clawback and it usually applies in the first couple of years. It does not normally cost you directly, but it is a reason to ask your broker how they handle early refinancing.
Does Commission Affect the Advice You Get?
It is a fair question. Brokers must act in your best interests when giving credit assistance on a consumer home loan, and must put your interests first if there is a conflict. You can also ask your broker to explain why a loan suits you and what alternatives they considered.
Questions to Ask a Broker About Fees
- Will I pay you any fee, now or later?
- Which lenders are on your panel and how are you paid by each?
- What happens if I refinance within the first two years?
- Can you give me a Credit Guide and quote in writing?
Related Guides
Ask Us About Fees Before You Commit
Get a clear, written explanation of how we are paid and what, if anything, you pay.
Book a Free Consultation Explore Home LoansFrequently Asked Questions
Do I have to pay a mortgage broker?
How much do mortgage brokers charge?
How much commission does a mortgage broker get?
What is a trail commission?
What is commission clawback?
Are mortgage broker fees tax deductible?
This article is general information only and is not financial or credit advice. Speak to a licensed broker about your situation.
