Mortgage Broker or Bank Direct? A Banker's Honest View

People assume that because I’ve spent 30+ years on the bank side of lending, I’d naturally tell you to skip the broker and come straight to a bank. That’s not actually my view, and I think it’s worth explaining why, from someone who’s watched this decision play out from the other side of the desk for a long time.

What a Broker Actually Does Differently

A broker works across a panel of lenders and gets paid (usually by the lender, via commission) once a loan settles. Their genuine value is comparison — surfacing options across multiple banks and non-bank lenders you’d otherwise have to research yourself, and often having a workable sense of which lender’s current credit policy suits your specific situation.

That last part matters more than people realise. Every bank’s appetite shifts over time — one lender might be more flexible on self-employed income this quarter, another more competitive on investment lending. A good broker who’s actively working the market has a live sense of this that’s hard for an individual borrower to replicate from outside.

What Going Direct Actually Offers

Going straight to a bank means dealing with someone who knows that lender’s own products, policies, and internal processes in real depth — sometimes more depth than a broker juggling dozens of panel lenders can maintain for any one of them. If you already have a strong relationship with a bank, or your situation fits mainstream lending criteria cleanly, going direct can be simpler with fewer parties in the process.

The Commission Question, Honestly

Broker commissions are generally paid by the lender, not out of your pocket directly, and structures are more regulated now than they were years ago — the old incentives to push you toward a bigger loan than you needed have been substantially reformed. That said, it’s still reasonable to ask any broker directly which lenders they’re accredited with and how they’re paid. A good broker won’t dodge that question.

When I’d Genuinely Recommend Each Path

Consider a broker if:

Your situation is even slightly non-standard — self-employed, contract income, a guarantor arrangement, or a property type that not every lender handles the same way
You want a genuine comparison across multiple lenders without doing that legwork yourself
You’re not confident which lender’s current policy fits your circumstances

Consider going direct if:

Your situation is straightforward PAYG income against a standard residential property
You already have an existing relationship or specific product in mind with a particular bank
You want to deal with one party who has deep, specific knowledge of that one lender’s process

Frequently Asked Questions

Do mortgage brokers cost the borrower money directly?

Generally no — brokers are typically paid a commission by the lender once the loan settles, not a fee charged to you. It’s still worth confirming this directly with any broker before proceeding.

Is a broker’s advice biased toward whichever lender pays the most commission?

Commission structures have been reformed to reduce this risk, but it’s a fair question to ask any broker directly — which lenders they’re accredited with, and how commissions vary across their panel.

Is it harder to get approved going through a bank directly versus a broker?

Not inherently — the same lending criteria apply either way. The difference is in comparison and guidance, not in whether one path is “easier” to get approved through.

The Bottom Line

Neither path is universally better — they solve different problems. A broker earns their place when your situation benefits from comparison and specific-lender knowledge you don’t have time to gather yourself. Going direct earns its place when your situation is straightforward and you already know where you want to bank.

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Mortgage Broker or Bank Direct? What 30 Years on the Bank Side Taught Me