This compares how getting a home loan works through a broker versus a big four branch. It is not a rate comparison, because rates move and depend on your deposit and loan size. What does not change week to week is the structure.
This is a comparison of how getting a home loan works through Loan Lounge versus walking into a Commonwealth Bank, Westpac, NAB or ANZ branch. It is not a comparison of interest rates. Rates move often, they depend on your deposit and your loan size, and any rate I printed here would be wrong by the time you read it. What doesn’t change week to week is the structure, and the structure is what this page is about.
Two things up front. I worked at CBA and at ANZ before I started Loan Lounge in 2015, and we put plenty of clients into big four loans through our panel, so this page is about how you get there.
How do they compare, side by side?
| Big four branch or app | Loan Lounge | |
|---|---|---|
| Lenders available | That bank’s products | Over 75 lenders on our panel |
| Who assesses your application | That bank, under its own credit policy | We match your file to the lender whose policy suits it, then that lender assesses it |
| Legal duty to act in your best interests | None for staff selling the bank’s own loans | Yes, best interests duty since 1 January 2021 |
| Cost to you | No arranging fee in my experience; product fees may apply | No fee for standard residential loans (lender pays commission); product fees may apply |
| Who you deal with | Branch staff, call centre or app | One broker, by name, from first call to settlement |
| Languages | Varies by branch | English, Vietnamese, Cantonese, Mandarin |
| Where | Branch network, app | Burwood and Cabramatta lounges, plus brokers in Marrickville, Bankstown, Bella Vista, Parramatta, phone and video Australia-wide |
| Review after settlement | Whatever you arrange yourself | Annual review, trail-funded |
| Where part of the revenue goes | Shareholders | 10% of trail to anti-trafficking partners, now over $6,000 a month |
| Complaints | Bank’s internal process, then AFCA | Ours, then AFCA |
What each row means
Lenders available. A bank employee can only sell you that bank’s loans. If your file fits their policy, fine. If it doesn’t, the answer is no, and it’s not the branch’s job to tell you whether the bank across the road would have said yes. With a panel we can put the same application in front of the lender whose policy fits it, which sometimes is a big four bank and sometimes isn’t.
Who assesses. A common misunderstanding: brokers don’t approve loans. The lender does, under its own policy, on the documents you supply. What we do is choose which lender sees the application and how it’s presented. Two lenders can look at the same self-employed income and reach different numbers, because they weight the years differently or treat add-backs differently, and getting that choice right is most of the job.
The duty. Since 1 January 2021 brokers have had a best interests duty under the National Consumer Credit Protection Act, explained in ASIC‘s RG 273. Staff selling their own bank’s mortgage do not. They have responsible lending obligations, which are about not lending you something unsuitable. That’s a floor. The best interests duty is a different thing: I have to be able to show why the loan I recommended was the right one for you out of what was available.
Cost. We don’t charge you a fee for arranging a standard home loan, and in my time in the banks the branch didn’t either (the loan itself may carry lender fees either way). The bank pays its staff out of its margin. The lender pays the broker a commission, and we set out the published ranges in Why choose a broker over going direct to a bank. We disclose what we’ll receive. If we ever charged a fee directly you’d get a written quote to sign first.
Book a time with a Loan Lounge broker — no cost, no obligation.
Who you deal with. In a big bank the person who takes your application and the person you ring for an update are often not the same person. Here it’s one broker, and their direct number is on their profile page. Several of our Google reviews mention being sent progress updates without having to ask, and when we’ve dropped the ball it’s communication that gets complained about.
Languages. In the 2021 Census 43.3% of Cabramatta residents spoke Vietnamese at home, and 32.1% of Burwood residents spoke Mandarin. Our brokers between them speak English, Vietnamese, Cantonese and Mandarin. With us you can book the broker who speaks your language.
The ACCC measured that gap in its 2020 home loan price inquiry, and we go through the numbers in Loyalty to your bank is a tax on your future. That gap is how the loyalty tax works: the bank prices for new business and lets existing customers drift. We have a financial reason to review your loan (trail stops if you leave) and we’re upfront that it’s a financial reason.
Where the money goes. A bank’s profit goes to the bank, which is how banks work and isn’t a complaint. Ten percent of our trail income goes to organisations working against human trafficking, every month, and has since the business started in 2015. It doesn’t change your loan.
When is the bank the better answer?
If you have a simple profile, a long relationship with one bank and an offer you’ve checked against the market, going direct can be fine. Now and then the right product for someone is one we can’t reach through our panel, and when that’s the case we say so.
Also: a bank can do your everyday banking, your credit card and your home loan under one login. We can’t. If that convenience matters more to you than the comparison, that’s a real preference and we won’t argue with it.
What we’d suggest
Get the bank’s offer in writing, then bring it to us. It costs nothing, it takes an hour, and one of two things happens: we tell you the bank’s offer is good and you take it, or we find something that suits you better and you take that. Call 02 9037 2825 or book directly with a broker.
This article is general information and does not take your circumstances into account. Loan Lounge is not affiliated with Commonwealth Bank, Westpac, NAB or ANZ beyond their inclusion on our lender panel.
Frequently Asked Questions: Loan Lounge vs the Big 4 Banks
Is Loan Lounge affiliated with the big four banks?
No, beyond their inclusion on our lender panel. Plenty of our clients end up in a big four loan, arranged through us.
Do I get a worse rate going through a broker?
In our experience, no. Lenders do not price differently by channel. The broker’s job is to find which lender suits your file.
Can a broker do everything a bank branch can?
Not quite. A bank can put your everyday banking, card and home loan under one login. If that convenience matters more than comparing lenders, that is a fair preference.
Related reading
- Why Choose a Broker Over Going Direct to a Bank?
- Mortgage Broker vs Bank: Why a Lender Panel Beats One Bank
- Broker vs Comparison Site: What Aggregators Don’t Tell You
- More on the services we arrange
Book a broker or find a broker near you. Or call the Burwood office on 02 9037 2825.
General information only. This article does not take your objectives, financial situation or needs into account, and is not financial product, tax or legal advice. Lending criteria, fees and rates vary by lender and change without notice. Loan Lounge, Australian Credit Licence 515608.