If a borrower only ever talks to their bank, they see one shelf in a very large supermarket. A mortgage broker opens up the whole shop, helps them choose what is right for their circumstances, and keeps checking the price long after they’ve walked out of the store.
For lenders, this shift matters. Borrowers are choosing the whole shop over the single shelf, and the broker channel has become the main way Australians access their home loans.
Since 2021, mortgage brokers have been legally bound by the Best Interests Duty*. This requires them to prioritise the client’s interests when recommending home loan products. Banks, when offering their own products, are not subject to this duty. Not only that, but a bank will try to fit a buyer to its existing product range, rather than searching the market for the product that best matches the borrower’s circumstances.
Borrowers understand this difference. It has accelerated the level of trust they place in brokers and positioned the broker channel as the natural place to turn when comparing options.
In March 2025, 71.8% of all new residential home loans in Australia were arranged via brokers*, more than seven out of ten new mortgages and the highest share on record.
This isn’t a spike or anomaly. Broker market share has been rising steadily for more than a decade. The reason is simple: Australians value independent advice, more choice and someone who can advocate on their behalf.
For many borrowers, the lowest rate is not the only consideration. Some need offset accounts, redraw facilities, fixed and variable splits, SMSF borrowing arrangements, or flexibility for future property purchases. Others want the ability to make extra repayments without penalty or to structure their loan around complex income scenarios.
Just as importantly, a mortgage broker will advocate for their client. If a borrower’s circumstances are complex; for example, self-employed income, high loan-to-value ratios, or non-standard structures a broker will go in to bat with lenders. They know which policies and lenders are more accommodating, how to package the application, and how to position the case so it has the best chance of approval.
A single bank can only offer its own suite of features and policies. A broker is better equipped to scan the market, weigh up the options, and match the borrower with the lender whose product set genuinely suits their needs.
Mortgage brokers are experts in the lending process. They understand credit policy, documentation requirements and lender systems inside out. For the borrower, this means less time chasing paperwork and fewer dead ends. A broker does most of the legwork collecting documents, packaging applications and liaising with lenders.
The biggest frustration borrowers face when dealing directly with their bank is what has been labelled the loyalty tax. Clients often discover that their bank is advertising sharper rates for new customers while existing customers are locked out of those offers.
The result is predictable. Borrowers either pay more than they should, or they refinance away. The ACCC has confirmed this behaviour*, finding that long-term customers often pay higher rates due to opaque and discretionary pricing.
A current client Daniel is assisting has a loan in their SMSF. They obtained the loan about five years ago when very few lenders were active in this space. Today, they are currently 2.3% p.a. higher in interest rate than what they should be paying, as they obtained the loan direct from the lender, and the lender has not continued to provide competitive market rates, instead charging them a loyalty tax for staying. We’ll obviously be resolving this, stat!
Another client just refinanced their principal place of residence and their investment property loans. After their fixed rates expired, the major bank did not move them to the current new client variable rate but instead placed them on a much higher rate. By refinancing, they saved more than $1,000 in repayments per month.
This is where brokers play a decisive role. They identify when a client is paying a loyalty tax, request repricing where possible, and arrange refinancing when necessary. It is a powerful driver of churn away from direct-to-bank channels and a core reason borrowers keep turning to brokers.
A direct-to-bank mortgage relationship often ends once the loan is set up. A broker’s role does not. They continue to monitor the loan, check pricing, and act when a better outcome is available. This ongoing service keeps borrowers engaged and ensures lenders must remain competitive if they want to hold onto that customer.
The supermarket analogy tells the story. Borrowers want access to the whole aisle, not just one shelf. They want transparency, choice, advocacy and expertise. They want someone to manage the legwork and stay in their corner long after the loan is written. The loyalty tax has only reinforced the shift. With more than seven in ten new mortgages now written through brokers, the broker channel is not just important, it is the primary way Australians engage with lenders.
Sources
*ASIC Regulatory Guide 273: Mortgage Brokers
*Mortgage & Finance Association of Australia (MFAA) – March 2025 Market Share Report
*ACCC Home Loan Price Inquiry – Final Report
