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Do You Pay a Mortgage Broker? Fees & Costs
For most buyers a mortgage broker costs nothing directly: the lender pays them. Here's what a broker actually costs you, and the loan fees that aren't the broker's.
For most buyers, a mortgage broker costs nothing directly. The lender pays them a commission for arranging your home loan, so you usually don’t hand over a fee, according to the Australian government’s MoneySmart service. The short answer to “do you pay a mortgage broker?” is usually no.
But “free to you” comes with two things worth knowing. A broker can charge you a direct fee in some cases, and the loan itself still has its own costs, whether you use a broker or not. Neither makes a broker a bad deal. They just mean “free” needs a footnote.
This guide covers what a broker actually costs you: when a fee can apply, what you’d pay on the loan either way, and how to compare the real cost. New to brokers? Start with what a mortgage broker does.
- For most buyers a mortgage broker costs $0 directly: the lender pays them a commission for arranging the loan (ASIC MoneySmart). The broker is paid by the lender, not by you.
- A broker can charge you a direct fee, but only if it’s set out in a written quote you sign first. There’s no standard published amount, so read the quote.
- The broker’s fee isn’t the loan’s fees. The loan still carries its own costs, like an application fee, ongoing fees, and usually LMI if your deposit is under 20%, whether you use a broker or go direct.
- “Free to you” doesn’t mean the route is cheaper. Whether a broker gets you a better deal is a comparison, not a given, so weigh the actual loan on rate, fees and total cost.
- Clawback can’t land on you: where a broker’s deal includes one, the lender recovers commission from the broker or aggregator, not you (reg 28VG). Your loan’s own exit costs can still apply if you leave early.
Do you pay a mortgage broker?
In most cases, no, not directly. The lender pays your broker a commission for arranging the loan, so the service usually costs you nothing out of pocket (ASIC MoneySmart). How that commission works is a topic of its own: how mortgage brokers get paid covers the upfront-and-trail detail. Here the point is simpler: it comes from the lender, not from you.
There is one exception. A broker can charge you a direct fee in some cases, but only under a written quote you sign up front (ASIC MoneySmart). They can’t be paid before the service is provided, and without that signed quote, no fee falls to you.
Who pays the broker: usually the lender’s commission, and only you if you sign a written quote first. Source: ASIC MoneySmart.
When can a broker charge you a fee?
Most brokers don’t charge you directly, but some can. Where a broker does charge a fee, the rules are strict. It has to be set out in a written quote you sign first, and they can’t ask for payment before providing the service (ASIC MoneySmart). That means a direct fee shouldn’t come as a surprise. It’s something you agree to up front, in writing.
For most buyers no direct fee applies at all. If one does, don’t expect a set price: what a broker charges varies with the broker and the job, so the figure that matters is the one written in your quote. The move is simple: ask early whether any fee applies, and read the written quote and the broker’s credit guide before you agree to anything.
The costs you pay either way: the lender's loan fees
This is the distinction that trips people up: the broker’s fee is not the loan’s fees. Whether you use a broker or walk into a lender yourself, the loan can carry its own costs, and those are the lender’s, not the broker’s.
Typically that means an application or establishment fee when the loan starts, ongoing or annual service fees while it runs, and a discharge fee when you close it (ASIC MoneySmart). A fixed-rate loan can also carry a break fee if you exit early. And if your deposit is under 20% of the property’s value, you’ll usually pay lenders mortgage insurance (LMI), unless a guarantee or exemption applies. It’s a one-off cost that protects the lender if you can’t repay, not you (ASIC MoneySmart). None of these is the broker’s charge. They’re the price of the loan, and you’d pay them going direct too.
| Charge or payment | Whose is it? | Do you pay it? |
|---|---|---|
| The broker's commission | The broker's pay | No; the lender pays it |
| A direct broker fee | The broker's | Only if you sign a written quote first |
| Application, ongoing and discharge fees | The loan's | Often; a loan cost, not the broker’s. Check the product |
| LMI | The loan's | Usually, if your deposit is under 20% (unless a guarantee applies) |
| Clawback | The broker or aggregator's | No; the law bars passing it to you |
Does a broker cost more than going direct?
Usually there’s no direct broker fee either way, so the real question isn’t the broker, it’s the loan. You’ll often read that your rate is the same whether you use a broker or go direct. Treat that as an industry claim, not a given, and compare the actual offers rather than the label. What decides your cost is the specific loan, not the route, though the route can change which loans you can access. Compare the actual offers on rate, the comparison rate, fees and total cost, using each loan’s Key Facts Sheet, the standard document every lender must provide, so you’re weighing like for like.
Whether a broker is worth it for you, beyond cost, is its own question. Broker vs going straight to your bank weighs that decision.
Could clawback ever cost you?
Not the clawback itself. Clawback is an arrangement between the lender and the broker, or their aggregator, not between the lender and you. Where a broker’s remuneration deal includes one, the lender can recover the broker’s upfront commission if you repay or refinance early. By law that can’t run more than two years after the loan starts (National Consumer Credit Protection Regulations, reg 28VG), and the rules bar passing that cost on to you. What can still cost you is the loan’s own exit charges, like a discharge or fixed-rate break fee. The only thing a broker can charge you directly is a fee set out in the written quote above.
What to check on cost before you sign
The whole cost picture comes down to a few checks. Ask the broker, in writing, whether any fee falls to you and what commission they’ll receive. Confirm the loan’s own fees, the application, ongoing and discharge fees, and whether LMI applies to your deposit. Then compare the total cost of the actual loan, its rate, comparison rate and fees, not just the fact that the broker is “free”. It’s worth checking the broker is licensed on ASIC’s register before you engage, though how to choose a broker is the fuller checklist.
The strongest preparation is knowing your own numbers first. You can map your borrowing position before you see a broker with knest.ai (an indicative starting point, not a lender’s assessment), so you can weigh the offer rather than take it.
The bottom line for buyers
For most buyers, a mortgage broker costs $0 directly, because the lender pays the commission. A direct fee is possible, but only in a written quote you sign first, and there’s no standard amount to expect. What you might still pay, either way, is the loan’s own costs: application, ongoing and discharge fees, and usually LMI if your deposit is under 20%.
“Free” is true, but with a footnote. The broker is usually free to you; the loan isn’t. Get any fee in writing, keep the broker’s fee separate from the loan’s, and compare the total cost of the actual loan, not the label.
Get your income, deposit and goals organised with knest.ai’s free AI assistant, and understand the factors a lender weighs, so you can judge a broker’s recommendation and its cost for your own circumstances.
Ask knest.aiFrequently asked questions
Do you pay a mortgage broker?
Usually not directly. According to ASIC’s MoneySmart, the lender pays the broker a commission for arranging the loan, so most buyers pay nothing out of pocket. A broker can charge a direct fee, but only if it’s set out in a written quote you sign first.
How much does a mortgage broker cost?
For most buyers, nothing directly. If a broker does charge you a fee, there’s no standard published amount, and it has to be set out in a written quote you sign first (ASIC MoneySmart). Ask early, and read the quote before you agree to anything.
Are mortgage brokers free?
Usually free to you directly, because the lender pays them. But “free” doesn’t mean the route is automatically cheaper, and it doesn’t remove the loan’s own fees. Compare the actual loan on rate, fees and total cost, not just the label.
What fees do you actually pay on a home loan?
The loan’s own costs, whichever way you arrange it. These can include an application or establishment fee, ongoing or annual fees, and a discharge fee when you close it (ASIC MoneySmart). With a deposit under 20% you’ll usually pay LMI, unless a guarantee or exemption applies, and it protects the lender, not you. These are the loan’s fees, not the broker’s.
Would a broker’s clawback ever cost me?
No, not the clawback itself. Clawback is where the lender recovers the broker’s upfront commission (from the broker or their aggregator) if a loan with a clawback term is repaid or refinanced early. It’s capped at two years, and the law bars passing that cost on to you (reg 28VG). Your loan’s own exit costs, like a discharge or break fee, can still apply.
Sources
- ASIC MoneySmart, “Using a mortgage broker”, updated 4 September 2026, retrieved 2026-09-14, https://moneysmart.gov.au/home-loans/using-a-mortgage-broker
- ASIC MoneySmart, “Choosing a home loan”, updated 16 September 2026, retrieved 2026-09-28, https://moneysmart.gov.au/home-loans/choosing-a-home-loan
- ASIC MoneySmart, “Switching home loans”, retrieved 2026-09-14, https://moneysmart.gov.au/home-loans/switching-home-loans
- ASIC MoneySmart, “Lenders mortgage insurance (LMI)” (glossary), retrieved 2026-09-14, https://moneysmart.gov.au/glossary/lenders-mortgage-insurance-lmi
- ASIC MoneySmart, “Save for a house deposit”, updated 6 August 2026, retrieved 2026-09-14, https://moneysmart.gov.au/saving/save-for-a-house-deposit
- Federal Register of Legislation, National Consumer Credit Protection Regulations 2010, reg 28VG “Clawback requirements” (current compilation), retrieved 2026-09-14, https://www.legislation.gov.au/F2010L00631/latest/text
Eleanor Hayes, Editor, knest.ai
This article is general information for Australian home buyers, not personal financial or credit advice. knest.ai is a buyer-focused property intelligence platform that provides decision support, not a broker or lender service, and does not replace a licensed mortgage broker or lender. Any broker introduction through the Home Loan Expert is buyer-initiated and never automatic. Where knest.ai receives a benefit from such an introduction, that benefit is disclosed to you. Verify any figures for your own circumstances before you act.
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