Do Mortgage Brokers in Melbourne Charge Fees?

Before you buy a home, you may be wondering if you will end up paying mortgage broker fees. 

Do Mortgage Brokers in Melbourne Charge Fees?

The short answer is that you won’t pay fees in return for your broker’s support, and if you do, they will be minimal. 

Take a look at a breakdown of how mortgage broker fees work, how costs compare to going directly to a bank and what to expect when you partner with a transparent, client-focused broker from Lend & Co.

When Mortgage Brokers in Melbourne Charge Fees (and When They Don’t)

In most standard borrowing scenarios, you won’t pay a fee to use a mortgage broker when you buy property. 

Why Most Mortgage Broker Services Are Free for Borrowers

The reason Melbourne brokers provide their service at no direct cost is that they receive a commission from the lender once the loan is settled. This commission doesn’t affect your interest rate or repayments because it is the way banks and lenders compensate brokers for introducing new clients. 

Situations Where Mortgage Broker Fees May Apply

However, some situations can be more complex. If your borrowing structure is unusual, involves multiple trusts and entities or requires significant research and planning, a broker may charge a direct fee for the time they spend researching the deal. A fee may also apply if you’re borrowing a very small amount, because the broker’s commission is so low.

Fee Disclosure and Best Interests Duty

Any broker you work with should explain their fees in writing before you accept their help. Transparency is a key part of the industry’s Best Interests Duty, which legally requires brokers to ensure clients receive advice that meets their objectives and financial situation. The Mortgage & Finance Association of Australia (MFAA) also provides guidance on how mortgage brokers are paid and what borrowers should expect in terms of disclosure.

Mortgage Broker Fees vs Going Directly to a Bank

Many people assume going straight to a bank is cheaper than using a broker. In reality, neither option should cost you anything upfront. 

Are Banks Cheaper Than Mortgage Brokers?

So, with bank and mortgage broker fees being zero or very small, how should you choose between the two, and which option is more likely to suit your financial situation?

Product Choice and Rate Comparison

Firstly, banks can only offer their own products. You get free service to choose a loan, but your product options are limited. As a result, you may end up with a higher rate because you weren’t aware of any other options. 

The Long-Term Value of Using a Mortgage Broker

Mortgage brokers, on the other hand, can compare loans from a wide range of lenders, including major banks, non-banks and specialist lenders. This gives you access to more competitive rates, features, and borrowing structures, and helps ensure the loan you choose genuinely suits your circumstances.

Using a mortgage broker means you are getting a personalised comparison service for free in most cases, plus support with paperwork and documentation, as well as ongoing loan reviews. Having this additional guidance saves time, stress and potentially thousands of dollars over the life of your loan.

How Much Does It Cost to Sign Up for a Mortgage in Melbourne?

While brokers generally won’t charge you for their service, the purchasing process itself involves different costs. 

Common Home Loan and Property Purchase Costs

• Loan establishment fees from the lender
• Valuation fees to confirm the value of the property
• LMI (Lenders Mortgage Insurance) if you are borrowing more than 80%
• Stamp duty (Government tax, with the amount depending on the value of the property)
• Property inspection fees
• Conveyancer fees of around $2-$3k for a legal specialist to help you exchange contracts with the seller

Your broker will help you understand which costs apply, compare providers and determine the most cost-effective path forward.