Choose Between Mortgage Broker Or Bank

The concept mortgage broker is growing in Australia as more people are relying on them for home loan. But before them, prospective buyers used to contact to the bank directly for any kind of mortgage loan. So, why the topic is now so popular now and why home buyers now rush to a broker instead of their own bank? Let me explain these two concepts separately and compare what both of them offer.

Mortgage Broker

A professional financial agent, who connect the lender and borrower and make an amount in the process. As a borrower, you will get suggestions of potential lender and loan offers based on your resources. A lender, on the other hand, will find a trustable borrower through the broker. They basically work as a recruiter for the lender because they will recruit you as a secured borrower. You will get his experienced suggestion through every steps of getting the loan from a lender. Sometimes, the lender can be a bank.


Banks also offer loan for mortgage issues to potential borrower. The loan officer acts like a broker in this case. He will go through your document and offer the suitable loan for your condition. They usually have a condition list and you will have to fit in it to be eligible for the loan. If they select you as a borrower, they get a commission from the bank.

Now let’s compare them together…

Mortgage Broker over Bank

• Mortgage broker works with the target to offer you the lowest possible interest rate.
• The mortgage broker can work with a borrower with a credit score below the line, but banks are strict in this area.
• To be an eligible borrower through a broker, the only condition you need to have is you have to be able to pay it back. But banks have a long list of criteria that you need to fulfill.
• In the banks, you need to negotiate with the loan manager. But the broker negotiates for you.

Bank over Mortgage Broker

• You will get the loan immediately from the branch of the bank you visited. But a broker might suggest a lender who lives far away and you may need to travel a long way to get the loan or need to wait for the lender to come to you.
• The lenders the brokers suggest may not be famous enough to research previous history. There is always a risk of fraudulent.
• The broker always gets commission from the lender even if you cannot handle the loan you have. Some brokers might even be inexperienced in this matter. But a bank loan manager is promoted based on his talent and he always knows how to deal the situation.
• If a bank loan office makes a mistake, the bank will consider it and help you. But there is no one to take account of the mistakes the broker makes.

As you can see, there are drawbacks of a mortgage broker as well as of the banks. At the end of the day, it is your decision. You are the one who will buy a house so you get to decide whether you will go to a bank directly or you will meet a broker for your mortgage loan. You can check Adelaide mortgages for more details.