Last updated: 28 October 2026 · Reading time: 8 minutes
In Australia, the lender usually pays the mortgage broker, not you. The industry benchmark is an upfront commission of 0.65% to 0.70% of the amount drawn, plus a trail of about 0.15% a year on the outstanding balance. Some brokers also charge a fee, but it must be quoted in writing and accepted before they help you.
That is why many brokers call their service free. It is free of a direct broker charge in the usual case. It is not a free home loan. You still pay interest, lender fees and your purchase costs. This guide covers the money flows, the numbers, the rules on clawback and incentives, and a short answer to what a broker actually does.
| Question | Short answer | Source |
|---|---|---|
| Who usually pays the broker? | The lender | ASIC Moneysmart, updated 13 October 2026 |
| Upfront commission benchmark | 0.65% to 0.70% of the drawn amount, net of offset | MFAA remuneration factsheet |
| Trail commission benchmark | Generally 0.15% a year on the outstanding balance, net of offset | MFAA remuneration factsheet |
| Can a broker charge you directly? | Yes, but only with a written quote you accept first | ASIC Moneysmart |
| Can you be made to pay a clawback? | No. The law stops the broker passing it on to you | National Consumer Credit Protection Regulations, regulation 28VG |
How do mortgage brokers get paid in Australia?
Lenders pay brokers in two parts. An upfront commission is paid when the loan is drawn. A trail commission is paid over time while the loan stays open. The money usually passes through the broker's aggregator before the broker receives their share. A direct charge to you is a separate thing, and it is the exception.
| Payment | Who pays | Who receives | What it is for | Timing |
|---|---|---|---|---|
| Upfront commission | The lender | The broker, usually through an aggregator | Arranging and settling the loan | Once, after the loan is drawn |
| Trail commission | The lender | The broker, usually through an aggregator | The ongoing relationship while the loan is open | Recurring, based on the outstanding balance |
| Broker service fee | You | The broker or their firm | A service the broker has quoted for | Only after you accept a written quote |
Gross commission is the business's revenue. It is not the personal pay of the individual broker. Aggregator charges and the cost of running the business come out of it first.
What does a mortgage broker do?
A mortgage broker helps you work out what you can borrow, compares loans from the lenders they can access, recommends options, lodges your application and manages it through to settlement. Brokers arranged 81.6% of new home loans in the June quarter of 2026, according to MFAA research published on 3 September 2026.
| Stage | What the broker does | What you do |
|---|---|---|
| Fact find | Asks about your income, spending, debts, savings and goals, and checks the details | Supply documents and answer honestly |
| Comparison | Compares loans from the lenders they are accredited with | Say what matters to you, such as features, fees or a government scheme |
| Recommendation | Explains the options and gives written reasons for the loan they suggest | Read the reasons and ask about any option left out |
| Application | Prepares and lodges the application, then deals with the lender's questions | Respond quickly to requests for more documents |
| Settlement | Tracks approval and loan documents alongside your conveyancer | Sign documents and arrange the deposit and funds |
Since 1 January 2021, brokers have had to follow best interests obligations. ASIC's guidance in Regulatory Guide 273 sets out what that means. Those rules sit alongside responsible lending rules, which require reasonable inquiries and checks into your finances. A broker cannot guarantee approval, because the lender makes the decision. For the full comparison with going straight to a bank, read should you use a mortgage broker or go to a bank. To learn what the lender does with your application, read how home loan pre approval works.
Are mortgage brokers free for borrowers?
Usually there is no direct broker charge, because the lender pays the commission. Some brokers do charge a fee, which they must quote in writing before you accept it. A free broker is still not a free loan. Interest, lender fees and buying costs are separate and you pay all of them.
| Cost | Paid to | Does a broker's "free" service remove it? |
|---|---|---|
| Broker commission | The broker, by the lender | It is paid by the lender, not by you |
| Broker service fee, where one is charged | The broker or their firm | No. It is a direct charge and needs a written quote you accept |
| Interest on the loan | The lender | No |
| Lender application, valuation or ongoing fees | The lender | No |
| Stamp duty, conveyancing and other purchase costs | Governments and professionals | No |
A real example of a published fee is Home Loan Experts. Its fees page lists a $300 prepare to buy assessment, refunded if the customer later gets a loan through it. It also says exceptionally complex cases, or loans under $300,000, attract a quoted fee. That is one firm's own schedule, not an industry rate. Other brokers charge differently or not at all.
Having no broker fee does not prove a loan is cheaper. Compare the actual offers, including the rate, fees and features. ASIC Moneysmart suggests asking for the Key Fact Sheet for each loan you are comparing.
How much commission does a mortgage broker receive?
The MFAA, the broker industry body, publishes a benchmark of 0.65% to 0.70% for upfront commission and generally 0.15% a year for trail. The upfront rate applies to the amount drawn, net of any offset. The trail rate applies to the outstanding balance, net of any offset. Actual lender schedules differ.
| Commission | Benchmark rate | Applied to | Paid |
|---|---|---|---|
| Upfront | 0.65% to 0.70% | Drawn funds, net of offset | Once |
| Trail | Generally 0.15% a year | Outstanding balance, net of offset | Recurring |
Two cautions. First, this is an industry benchmark, not every lender's published schedule. Second, the MFAA's own worked example excludes GST, and it does not label the tax basis of every headline rate. Our table below does not add GST either. If a broker quotes you a dollar figure, ask whether it includes GST.
How much does a broker make on a $600,000 home loan?
On a $600,000 loan with no offset, the benchmark gives an upfront commission of $3,900 to $4,200. The trail works out at $900 a year, which is $75 a month. These figures are gross revenue to the broker's business, before aggregator charges and running costs. They are not take home pay.
| Item | Calculation | Result |
|---|---|---|
| Upfront at 0.65% | $600,000 × 0.65% | $3,900 |
| Upfront at 0.70% | $600,000 × 0.70% | $4,200 |
| Trail at 0.15% for a year | $600,000 × 0.15% | $900 |
| Trail per month | $900 ÷ 12 | $75 |
This is NestPath's own arithmetic, done on 28 October 2026, using the MFAA benchmark rates. The loan amount is an example we chose. It is a snapshot, not a prediction. Real payments depend on the lender's schedule, when payments start, repayments and how the balance moves.
Does money in an offset account reduce broker commission?
Yes, on the benchmark. The MFAA describes both commissions as calculated net of offset. A $600,000 loan with $100,000 in an offset account gives a commission base of $500,000. Upfront commission then falls to $3,250 to $3,500. The size of the approved loan is not necessarily the amount commission is worked out on.
| Drawn loan | Offset balance | Commission base | Upfront at 0.65% | Upfront at 0.70% | Trail for a year at 0.15% | Trail per month |
|---|---|---|---|---|---|---|
| $600,000 | $0 | $600,000 | $3,900 | $4,200 | $900 | $75.00 |
| $600,000 | $50,000 | $550,000 | $3,575 | $3,850 | $825 | $68.75 |
| $600,000 | $100,000 | $500,000 | $3,250 | $3,500 | $750 | $62.50 |
| $600,000 | $600,000 | $0 | $0 | $0 | $0 | $0.00 |
The regulations point the same way. The National Consumer Credit Protection Regulations condition the commission exemption, and the cap on a percentage based payment uses the maximum drawdown net of offset over the initial year, with specified exceptions. Read the table as a constant balance snapshot. It does not say what happens if you deposit into an offset account later, because that depends on the lender's arrangement with the broker.
What is trail commission, and how long is it paid?
Trail commission is a small recurring payment from the lender to the broker while your loan is open. The benchmark is generally 0.15% a year of the outstanding balance, net of offset. It is not a promise of any particular service. Ask your broker in writing what contact and reviews you will get.
| What can change | Effect on the trail |
|---|---|
| You pay the loan down | The balance falls, so the trail falls |
| You build up an offset balance | The base is net of offset, so the trail falls |
We have not given an end date for trail because there is no single rule. How long it lasts depends on the lender's arrangement and on how long the loan stays with the lender.
Can a mortgage broker charge me a fee as well as receive commission?
Yes, it is possible. What matters is the service, the agreed charge and the written quote, not whether the broker also receives commission. A broker who wants a fee must give you a quote, and you must accept it before they provide credit assistance. ASIC describes the quote as something you sign and date.
| Service | Example of a fee | Refund condition | Source and date |
|---|---|---|---|
| Prepare to buy assessment | $300 | Refunded if the customer later obtains a loan through the firm | Home Loan Experts fees page, no date shown, read 28 October 2026 |
| Exceptionally complex case | Quoted individually | Set out in the quote | Same page |
| Loan under $300,000 | Quoted individually | Set out in the quote | Same page |
Before you accept any fee, ask for the following in writing:
- What the fee covers, and what it does not cover.
- The event that makes the fee payable.
- Whether any part is refundable and on what condition.
- Whether the broker will still receive commission from the lender.
Do I have to pay if my loan does not settle?
It depends on the fee terms you accepted. If you accepted no fee, there is no broker fee to pay. If you accepted a quote, the written terms decide whether a fee is due when a loan is declined, withdrawn or placed elsewhere. Do not assume either way. Read the quote before you sign.
| Situation | What to check in your quote |
|---|---|
| The lender declines the loan | Whether the fee depends on approval or on the work done |
| You withdraw before applying | Whether any part of the fee was for work already finished |
| You choose a different lender | Whether the fee depends on a loan arranged through this broker |
| You stop after a paid assessment | Whether the assessment fee is refundable and under what condition |
| The loan settles | Whether the fee is payable in addition to the lender's commission |
What is mortgage broker clawback?
Clawback is when a lender recovers commission it paid to a broker, usually because the loan was repaid or refinanced early. It is a commercial matter between the lender and the broker or aggregator. It is not an invoice to you, and the law limits it. The relevant clawback obligation is limited to 2 years.
| Party | Role in a clawback |
|---|---|
| Lender | Paid the commission, and may ask for some or all of it back |
| Aggregator or broker | Received the commission, and may have to repay it |
| You | Repaid or refinanced the loan. You do not repay the commission |
Regulation 28VG of the National Consumer Credit Protection Regulations 2010 covers this. It limits the relevant clawback obligation to 2 years, and it caps repayment at the benefit received. It also prevents the broker making the consumer pay because that benefit must be repaid.
Can a broker make me repay their clawback if I refinance?
No. The regulations stop a broker charging you because they have to repay commission. A broker can still quote a separate fee for work they do, such as arranging a refinance. The test is what the charge is for. If the charge appears only because the broker must repay a lender, ask them to explain it in writing.
| What you are asked to pay | What to ask for |
|---|---|
| A fee for a service you agreed to, set out in a quote you accepted | A copy of the signed quote and the description of the service |
| A charge that appears when you refinance or repay early | A written reason, the trigger and how the amount is worked out |
| A charge described as a repayment of commission | Pause and check regulation 28VG. Ask the broker's licensee to explain, and contact AFCA if you remain concerned |
A signed quote does not make a disguised clawback charge acceptable. We cannot say whether any particular contract is lawful. Look at the actual wording.
Can lenders pay brokers bonuses or other incentives?
Only within limits. The National Consumer Credit Protection Regulations set conditions for commissions. Benefits based on volume or tied to a campaign are excluded. Some small non cash benefits are allowed, such as a benefit worth less than $300 per recipient where similar benefits are not frequent or regular. So the rule is not that every gift is banned.
| Type of benefit | Position under the regulations |
|---|---|
| Volume based benefit | Excluded from the commission exemption |
| Campaign based benefit | Excluded from the commission exemption |
| Non cash benefit worth less than $300 per recipient, not frequent or regular | Exception under regulation 28VH |
| Conditional education or training, and IT support | Specific exceptions also exist |
You can ask your broker whether anything other than the standard commission arises from your loan. They must give you a Credit Proposal, which is covered below.
Where can I see the fees and commission for my loan?
In three documents. The Credit Guide describes the broker and their services, and is generally given early. A fee quote, if there is one, is accepted before credit assistance. The Credit Proposal is given when the broker assists you. ASIC also says that if the broker provided credit assistance, you can ask for a free copy of the written assessment for up to seven years from the date of the quote.
| Document | When you get it | What it tells you |
|---|---|---|
| Credit Guide | Generally early in the relationship | Who the broker is, what they do and how to complain |
| Fee quote | Accepted before credit assistance, where a fee applies | What you will be charged, and for what |
| Credit Proposal | When the broker provides credit assistance | The assistance provided and the recommendation |
| Written assessment | On request, for up to seven years from the date of the quote, if the broker provided credit assistance | The broker's preliminary assessment, where one applies |
Relevant brokers must also disclose the six credit providers they do most business with. That list shows where their business goes. It is not the size of their panel. Ask about both. The longer interview checklist is in how to choose a mortgage broker.
Does lender paid commission mean a broker will recommend the wrong loan?
Not automatically. The incentive concern is real, which is why the law has a conflict priority rule that puts your interests first. But a rule is not a guarantee. ASIC's October 2026 review found weak explanations in some firms for loans that were not the cheapest; the detail is in our broker versus bank guide. If your broker recommends a loan that is not the cheapest, ask for the reason in writing, along with the options considered.
How does NestPath's free broker matching get paid?
NestPath's broker matching is free for you. If you go ahead with a matched broker, the broker pays NestPath a referral fee. That payment comes from the broker, not from you. It is a separate arrangement from the lender commission described above, and it is the way NestPath earns from this service.
| Who | Pays | Receives |
|---|---|---|
| You | Nothing to NestPath for matching | An introduction to a broker |
| The matched broker | A referral fee to NestPath, if you go ahead with them | A prospective client |
| The lender | Commission to the broker, if a loan settles | A borrower |
A match is a starting point, not an endorsement. Check the broker's licence, ask for their Credit Guide and read any fee quote before you commit.
Get matched with a mortgage broker for free
NestPath's broker matching is free for you. If you go ahead with a matched broker, the broker pays NestPath a referral fee.
This page is general information, not personal advice.
Frequently asked questions
How do mortgage brokers get paid in Australia?
Mostly by the lender. The MFAA benchmark is an upfront commission of 0.65% to 0.70% of the drawn amount, net of offset, plus a trail of generally 0.15% a year on the outstanding balance, net of offset. The money usually passes through the broker's aggregator. Some brokers also charge a fee, but it needs a written quote you accept first.
Are mortgage brokers free?
Usually there is no direct broker charge, because the lender pays the commission. Some brokers do charge a fee, and they must quote it in writing before you accept it. A free broker is not a free loan. You still pay interest, lender fees and your purchase costs.
How much does a broker make on a $600,000 loan?
On the MFAA benchmark and with no offset, the upfront commission is $3,900 to $4,200. The annualised trail illustration is $900, equivalent to $75 a month, if the commission base stays unchanged. Actual payments depend on balances and lender conditions. That is gross revenue to the broker's business before aggregator charges and running costs. It is not take home pay. GST has not been added.
Does an offset account reduce broker commission?
On the benchmark, yes. Both commissions are worked out net of offset. A $600,000 loan with $100,000 in offset has a commission base of $500,000, so upfront commission is $3,250 to $3,500 and the annualised trail illustration is $750 if that commission base stays unchanged.
What is clawback, and do I have to pay it?
Clawback is when a lender recovers commission from a broker, usually after an early repayment or refinance. You do not pay it. The regulations limit the clawback obligation to 2 years and stop the broker making you pay because they must repay the benefit.
Can a mortgage broker charge a fee on top of commission?
Yes, it is possible. The broker must give you a written quote, and you must accept it before they provide credit assistance. Ask what the fee covers, when it is payable, whether any part is refundable, and whether the broker still receives commission from the lender.
Where can I see what my broker earns from my loan?
Ask for the Credit Guide, any fee quote and the Credit Proposal. The Credit Guide is generally given early, a quote is accepted before credit assistance, and the Credit Proposal is given when the broker assists you. ASIC also says that if the broker provided credit assistance, you can ask for a free copy of the written assessment for up to seven years from the date of the quote.
Does commission mean a broker will recommend the wrong loan?
Not automatically. Brokers must follow best interests rules and a conflict priority rule that puts your interests first. ASIC's October 2026 review found weak explanations in some firms for loans that were not the cheapest, so ask for the reason in writing along with the options considered.
More answers: 50 first home buyer questions, answered with sources.
How we checked: every figure on this page was read on the official source pages listed below on 28 October 2026.
Sources
- ASIC Moneysmart, Using a mortgage broker. Page dated: updated 13 October 2026.
- ASIC Moneysmart, Choosing a home loan. Page dated: updated 16 September 2026.
- Mortgage and Finance Association of Australia (MFAA), Broker remuneration factsheet. Page dated: no date shown.
- MFAA, Mortgage broker market share reaches record 81.6%. Page dated: 3 September 2026.
- Federal Register of Legislation, National Consumer Credit Protection Regulations 2010, regulations 28VB to 28VH. Page dated: compilation of 5 September 2026.
- Federal Register of Legislation, National Consumer Credit Protection Act 2009. Page dated: compilation of 30 June 2026.
- ASIC, Regulatory Guide 273 (RG 273). Page dated: 24 June 2020.
- ASIC, Responsible lending disclosure obligations: overview for credit licensees and representatives (INFO 146). Page dated: no date shown.
- ASIC, Report 840 (REP 840). Page dated: 13 October 2026.
- Home Loan Experts, Our fees, used only for that firm's own fees. Page dated: no date shown.
- NestPath, own arithmetic from the MFAA benchmark rates. Calculated 28 October 2026.
