Do mortgage brokers recommend the bank that pays them the most?

No. The banks all pay roughly the same commission, so there is nothing to gain by steering. And brokers work under a best interests duty: recommending a lender that pays more but costs the client more is a breach.

What is the best interests duty for mortgage brokers?

A legal duty on Australian mortgage brokers to act in the client's best interests when recommending a loan. If two options differ only in what they pay the broker, the broker must recommend the one that is better for the client.

Do all banks pay brokers the same?

Close enough that it doesn't matter. Upfront commission is roughly 0.65% of the loan and trail roughly 0.15% across the panel, so which bank a loan goes to makes little difference to a broker's income.

What incentive does a broker actually have?

That the loan settles and lasts. Commission is paid on settlement and clawed back if the loan closes inside 12 to 24 months, so a broker is paid for loans that are right enough to keep.

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Won't a broker just push me to whatever bank pays the most?

Bayley Clarke · Mortgage broker on the road · Last checked 1 September 2026 · 2 min read

The short answer

No. The way I think about it is that all banks pretty much pay me the same amount, so I don't really care which bank we go to. Part of the work is identifying which lender is actually in your best interests.

And it isn't only my word. Brokers work under a best interests duty. If a bank paid a higher upfront commission but its rates were higher than another option, I could not justify taking you there, and I'd be in breach if I did. The right bank has to fit your world, not mine.

The one minute version. The rest of this page is the detail underneath it.

All banks pay about the same

The short answer is no, and the reason starts with the maths. All banks pretty much pay me the same amount. My mental arithmetic is always the same: roughly 0.65% of the loan amount upfront, roughly 0.15% as trail, wherever the loan lands. There's no bank on the panel that pays enough more to be worth steering anyone toward.

So I don't really care which bank we go to. What I care about, because it's the actual work, is identifying which lender is in your best interests based on rates, fees, credit policy, what you're trying to do, and your medium to longer term goals, so that everything lines up.

The duty that settles it

Here's the part most people don't know. Mortgage brokers in Australia operate under a best interests duty. It's law, not a slogan.

So if there's a bank paying a higher upfront commission but its interest rates are higher than another option, I cannot justify why we would go to the higher cost option over the lower cost option. I would be breaching the duty I adhere to as part of being a broker. The bank pays me, but the bank doesn't get to choose you. You do, and the rules make sure of it.

Fit your world, not mine

At the end of the day, the bank's going to pay me either way. Which bank is irrelevant to my income and everything to yours. We've got to make sure we go to the right one to fit your world, not mine.

That's also why the recommendation always comes with the reasoning attached: rate, fees, policy, and what you want to do in the next few years. If the reasoning doesn't hold, you should push back on it, and I'd rather you did.

The honest bit: the incentive that does exist

The incentive brokers actually have isn't which bank, it's whether the loan settles at all. A broker gets paid when a loan settles and gets clawed back if it closes early. So the pull is toward loans that get approved and stay approved, which is a different thing from loans that are right for you.

That's why I'll tell you when the answer is don't borrow yet, or borrow less. A loan that's wrong for you is one you leave inside 12 months, and that costs me the whole fee. My incentive and your interest point the same way more often than people expect.

Want the reasoning behind the recommendation, not just the name of a bank?

A 30 minute call. You'll get the option I'd lean to and the exact reasons: the rate, the fees, the policy that says you'd be approved, and what it leaves open for you later. Push back on any of it.

Book a 30 minute call Call 0437 189 939

No cost to you. The bank pays me when a loan settles. · How I get paid

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