What does a mortgage broker cost?
For most home loans, you pay a mortgage broker nothing directly. The lender pays the broker a commission when your loan settles: an upfront amount, and a smaller ongoing amount called trail while the loan stays open. It doesn't change the rate or fees you pay; the same loan from the same lender costs you the same either way. What it can change is the broker's incentives, and those are worth knowing before you start.
How mortgage brokers actually get paid
Upfront commission. Paid once by the lender, after your loan settles. It's a percentage of the amount you borrow, worked out on the loan you've drawn less any money in your offset, and the percentage differs from lender to lender.
Trail commission. A smaller percentage of your balance, paid by the lender each month while the loan stays with them. It falls as you pay the loan down, and stops when the loan is paid out or moved.
Does using a broker cost you more?
No. Lenders don't add the commission to your rate or fees: it comes out of the lender's own costs, the same way a bank pays its own staff. What a broker adds is the rest of the market. A bank can only offer its own loans; a broker can compare the lenders on their panel and knows which of them will approve a position like yours before you apply.
If a fee ever applies, it's for unusual work where no commission will follow, such as some commercial or specialist lending. It's agreed with you in writing before any work starts, never added afterwards.
Where a broker's incentives point
Trail pays me to keep you where you are. I'm paid each month your loan stays open, so a broker has a reason not to suggest moving you, even when moving would save you money.
Clawback pays me not to move you early. If your loan is paid out within a set period after settlement, the lender takes its commission back from the broker. The period differs by lender. It's a real incentive to keep a new loan in place, and most borrowers have never heard of it.
Different lenders also pay slightly different commissions. Any broker who says none of this affects anyone is asking you to trust a claim, not a check.
The rule I hold against those conflicts
My recommendation is decided on the lowest net cost to you, and nothing else. What a lender pays me, and whether a commission could be clawed back, never enters it. You can check that: ask me to show you the comparison, the lenders I looked at and what each would cost you, and I will. If the right answer is a lender that pays me less, or staying with the loan you have, that's the answer.
The law backs this. Mortgage brokers must act in your best interests, and where a conflict exists, put your interests first.
A broker, or straight to your bank?
Going direct can be right if your situation is simple, your bank offers you a sharp rate, and you'd rather deal with one lender. A bank's staff are paid by the bank and can only offer the bank's own loans.
A broker earns their place when something about your position isn't standard, your income, your deposit, your job or the property, and the question is which lender will say yes, on what terms, before you apply.
What to ask any broker before you start, including me
How are you paid on my loan, and does the commission differ between the lenders you'd suggest?
Which lenders are on your panel, and are there any you can't use?
Will you show me the comparison, with the other lenders you looked at and why you chose this one?
Is there any fee, and will you put it in writing before you start?
If I refinance in the first couple of years, does that affect you, and how?
Any broker should answer all five without hesitating.
Questions people ask about broker pay
For most home loans you pay nothing directly. The lender pays the broker a commission when the loan settles, and it doesn't change your rate or fees.
Want to see how I'd compare your loan?
Tell me what you're buying or what you owe, and roughly your income and deposit. I'll show you the lenders I'd look at, what each would cost you, and how I'm paid on each.
You'll hear back within the hour in business hours, and by 9am the next business day after hours.
Sources
- 1
Money Brain's conduct rule: recommendations are decided on lowest net cost to the client; trail and clawback never influence a recommendation.
- 2
Darren Parker's credit representative and licence details, as on Money Brain's credit guide.
- 3
Updated 2 October 2026