A bank offers one set of products assessed under one credit policy. A broker can match your file to the lender whose policy actually suits it. Rate is what you see; credit policy is what decides whether you are approved and for how much.
Current as at September 2026.
Quick answer: a bank can only offer you its own loans, assessed under its own credit policy. A broker can put your application to any lender on their panel (ours has more than 75) and is legally required to act in your best interests when recommending one. Bank staff are not. In the June 2026 quarter, 81.6% of new home loans in Australia were arranged by brokers.
That’s the short version. The long version is about what “credit policy” means and why it matters more than the advertised rate.
Why does credit policy matter more than rate?
People comparing a broker to a bank usually compare rates, because rates are the number on the billboard. But a rate is only relevant if the lender will actually approve the loan you need. That decision comes down to credit policy, and every lender’s policy is different.
Some examples of where lenders disagree with each other, from the kinds of files we run:
- How much of your rental income they count. Most lenders shade it, meaning they only count a percentage to allow for vacancies. On 17 August 2026 Westpac and St.George moved from counting 90% to counting 95% on eligible investment properties. Same borrower, same property, more borrowing power, purely because of a policy change.
- How they treat self-employed income. Two full years of tax returns is the common ask. Some lenders will work with one year, or with BAS statements, or with an accountant’s letter. If your business had a good year and a bad year, which year the lender weights can be the difference between approved and declined.
- Living expenses. Lenders check your declared expenses against a benchmark (commonly the Household Expenditure Measure) and usually against your statements. How hard they look, and what they do when your spending is above the benchmark, varies.
- HELP debt, car leases, buy now pay later, credit card limits. Each lender has its own formula for how much these reduce your borrowing power.
- The property itself. Unit size, postcode, whether it’s a studio, whether there’s a commercial premises downstairs. Lenders keep lists.
A bank branch applies one set of answers to all of those questions. A broker can find the lender whose answers suit you.
What is the 3% serviceability buffer?
Since the cash rate started rising again in February 2026, and it’s gone up three times this year to 4.35%, borrowing capacity has fallen for most of the people we assess. Banks don’t assess you at the rate you’ll pay. APRA requires the banks it regulates to test whether you could still service the loan if your rate were 3 percentage points higher, and it confirmed that 3 point buffer again on 28 May 2026. Non-bank lenders aren’t regulated by APRA in the same way.
Lenders apply the buffer on top of different base assumptions, so the result differs. To make up round numbers, one lender’s calculator might say you can borrow $850,000 and another’s $920,000 for the same application. Neither is wrong, they’re using different policy. If you only ever see one calculator, you’ll never know the other number existed.
What is the best interests duty?
Since 1 January 2021 mortgage brokers have had a best interests duty under Part 3-5A of the National Consumer Credit Protection Act. ASIC’s Regulatory Guide 273 explains what it requires: when I recommend a loan, I have to be able to show it was the right loan for you out of what was available.
A bank employee selling their own bank’s loan has no equivalent duty. They have responsible lending obligations, which stop them lending you something unsuitable, but nothing requires them to tell you a competitor has a better product, and they couldn’t offer it to you if they wanted to.
Moneysmart‘s guidance says a broker should present you with more than one option and explain why the recommended one is in your best interests. If you use a broker and only ever see one loan, ask why.
What it costs
Nothing directly, for a standard residential loan. The lender pays the broker: an upfront commission at settlement and a monthly trail commission for the life of the loan. 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. Brokers must disclose the commission they’ll receive. If a broker wants to charge you a fee on top, Moneysmart’s guidance is that you get a written quote and sign it before the broker provides services.
Book a time with a Loan Lounge broker — no cost, no obligation.
A question I get: does the commission make the loan dearer? No. In our experience lenders do not price a loan differently because a broker sent it. Branches cost the lender money too. The question is whether the person doing the distributing is on your side of the table.
What happens to your loan after settlement?
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. The ACCC recommended that lenders be required to prompt customers with loans older than three years to review their rate.
Brokers have a commercial reason to keep reviewing your loan: trail stops if you leave. We book annual reviews for that reason and we’re open about why. Some banks do run retention calls. In my experience most existing customers never get one.
When is going direct to a bank better?
I’d be lying if I said never. If you have a simple profile, a long relationship with one bank, and you’ve checked their offer against the market and it holds up, going direct can be fine. Now and then the right product for someone is one we can’t reach through our panel, and a broker with a best interests duty should tell you so, which we’ve done.
And if you just prefer dealing with your own bank, that’s a legitimate preference. Moneysmart’s line is that the broker should still show you loans from other lenders so you can compare, which is what a comparison is for.
How do a broker and a bank compare?
| Not via a broker | Broker | |
|---|---|---|
| Lenders you can access | One | Our panel: over 75 |
| Credit policies compared | One | As many as suit your file |
| Legal duty to act in your best interests | No | Yes, since 1 January 2021 |
| Cost to you | None direct | None direct for standard residential loans, lender pays commission |
| Who applies and chases the lender | You | The broker |
| Who reviews the loan in year three | You, unless the bank calls | The broker, with a trail incentive to do it |
| Share of new home loans, June 2026 quarter | 18.4% | 81.6% |
What we do with all this
Our process runs in four steps, set out in A broker who doesn’t ask about strategy is a price-shopper. Conditional approval usually takes one to five business days once the lender has everything. Refinances typically settle in two to three weeks, sometimes longer. Purchases run around six to eight weeks.
If you’ve had a “no” from a bank, or a “yes” you’re not sure about, call 02 9037 2825 or book a time with one of the brokers. Bring the bank’s offer if you have one. We’ll tell you if it’s good.
This article is general information only and doesn’t take your personal circumstances into account. Lending criteria, fees and rates vary by lender and change without notice.
Frequently Asked Questions: Mortgage Broker vs Bank
Is a mortgage broker cheaper than a bank?
Loan Lounge doesn’t charge you for a standard residential loan; some brokers do, and must quote it in writing first. Either way the lender pays the broker a commission. Whether the loan itself is cheaper depends on which loan suits your situation, which is what the broker is there to find.
Do brokers have to act in my best interests?
Yes, since 1 January 2021. Bank employees selling their own bank’s loans don’t have the same duty.
Can a broker get me approved when a bank said no?
Sometimes. In our experience a decline is usually a policy decision at that lender, and another lender’s policy may treat the same file differently. Nobody can promise an approval before an application is assessed.
Related reading
- Why Choose a Broker Over Going Direct to a Bank?
- Loan Lounge vs the Big 4 Banks: A Side-by-Side
- 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.