Mortgage Brokers vs Banks: Which Is Better for Your Home Loan?

Stephane Belaicha
May 28
3 min read

When it comes to securing a home loan, one of the most important decisions you’ll make is who you choose to work with: a bank or a mortgage broker. Both options come with their own set of advantages and disadvantages — and choosing the right one can make a significant difference in the outcome of your home loan journey.

In this guide, we’ll break down the key differences, explore the pros and cons, and explain why working with a mortgage broker might be the smarter move — especially in today’s complex lending environment.

What Is a Bank Lender?

A bank is a direct lender. When you approach a bank for a home loan, you're dealing exclusively with their loan products. You’ll work with a bank loan officer who will help you apply for one of the bank’s mortgages.

Pros of Using a Bank:

Loyalty perks: Existing customers may receive lower fees or preferential rates.
Simpler process: No third parties involved — just you and the bank.
Strong brand recognition: Many people feel more secure with big, well-known institutions.
Bundling options: You can often combine your mortgage with savings accounts, credit cards, and offset accounts.

Cons of Using a Bank:

Limited options: You’re only shown the bank’s own products, not the broader market.
Higher interest rates or fees: Without competition, you might not get the best deal.
Less flexibility: Banks can be strict with credit policies, especially for self-employed borrowers or those with complex financial situations.
Sales focus: Bank staff work for the bank, not for you — their goal is to sell you one of their loans.

What Is a Mortgage Broker?

A mortgage broker is a licensed finance professional who acts as an intermediary between you and multiple lenders. Rather than being tied to a single bank, brokers have access to a wide panel of lenders, including major banks, non-bank lenders, and credit unions.

Benefits of Using a Mortgage Broker:

Greater choice: Brokers can compare dozens of loan products to find one that suits your needs.
Expert guidance: A broker will take time to understand your unique situation and provide tailored advice.
Time savings: They handle the legwork — paperwork, application process, and negotiation — for you.
Better outcomes for complex cases: Brokers are great for people with non-standard situations like self-employment, low documentation, credit issues, or purchasing through a trust or company.
Ongoing support: Many brokers provide annual loan reviews and help you refinance when the time is right.

Possible Drawbacks:

Broker quality varies: Not all brokers offer the same level of service. It’s important to choose someone experienced and reputable.
Lender panel limitations: While most brokers have access to 20–40 lenders, they don’t work with every lender in the market.
Commission-based model: Brokers are typically paid by the lender, which may create a conflict of interest. A good broker will be transparent about this.

So, Which One Should You Choose?

Scenario	Best Fit
You want to compare multiple loan options	✅ Mortgage Broker
You have a straightforward financial situation and are loyal to your bank	✅ Bank
You’re self-employed, have multiple properties, or need a complex loan structure	✅ Mortgage Broker
You want someone to guide you through the loan process from start to finish	✅ Mortgage Broker
You prefer dealing directly with your current bank for simplicity	✅ Bank

Final Thoughts: Why More Australians Are Turning to Mortgage Brokers

Over 70% of home loans in Australia are now arranged through mortgage brokers — and it’s not hard to see why. Brokers offer choice, convenience, and tailored support, especially for people who don’t fit the ‘perfect customer’ mould that banks prefer.

Whether you’re buying your first home, investing in property, or refinancing your existing loan, a mortgage broker can help you navigate the market, understand your options, and ultimately save you time, stress, and money.

Need help with your home loan? As a mortgage broker, we are here to simplify the process, compare lenders on your behalf, and help you secure a loan that works for your goals and lifestyle.

Let’s chat about your options — no cost, no obligation.