Conduct an Australian mortgage consultation by sending the Credit Guide first, completing a fact-find against best-interests duty and issuing a Credit Assistance Quote before you lodge. Treat the meeting as the needs analysis. Approval still waits on the lender.
The consultation should rank products by the client’s needs, not by commission. The fact-find still records the client’s position and objectives, even though ADI responsible-lending duties changed in 2021.
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Understanding the Role of a Mortgage Broker
Brokers’ Responsibilities
Mortgage brokers hold a credit licence or work as a credit representative. In the consultation they:
- Test borrowing capacity on the current lender calculator so the discussion uses the lender’s assessment settings.
- Explain the products they can actually lodge.
- Recommend the loan that fits, even when it pays less.
- Own the lodgement and the condition list after the client signs.
Broker Compensation
Most residential files pay you through lender commission. Some files also carry a disclosed borrower fee. Write the method in the Credit Guide and the quote. Older 0.65% to 0.70% plus GST illustrations are not a live grid. Confirm this month’s aggregator line.
Preparing for the Consultation
Pre-Consultation Requirements
Do this before the client sits down:
- Check your own name on ASIC Connect. Most new brokers appear as credit representatives. The licensee lodges the CL50.
- Send the Credit Guide and a short list of the features the client already named.
Documentation to Gather
Ask for the pack that the first lender will test:
- Proof of identity (passport or Australian driver licence).
- Payslips or tax returns, bank statements and a liability list.
- Permission to pull credit history and a written explanation for any default or late payment.
Send a Pre-Meeting Worksheet
Send a pre-meeting worksheet so the client arrives with numbers:
- Their latest credit score from a free bureau report (every 3 months from each bureau). Equifax still uses 0 to 1200. Experian uses 0 to 1000.
- Income, living expenses and debts they will declare.
- A repayment they can actually keep if the rate rises by the current serviceability buffer.
Conducting the Mortgage Consultation
Initial Meeting
Run the meeting in this order:
- Confirm the Credit Guide was received.
- Collect the documents and complete the fact-find for best-interests duty and lender policy.
- Name the products you can lodge and how you are paid.
ADI responsible-lending duties were narrowed in 2021. Non-ADI lenders still work under responsible lending. Your fact-find still has to support the recommendation. Do not ask the client to sign a blank authority.
Discussion Topics
Cover the items that will appear on the quote:
- Product type and the published comparison rates.
- Fees, the product rate and the buffered assessment rate. The RBA cash-rate target was 4.35% after the 11 August 2026 hold. That hold does not freeze every SVR.
- Offset, extra repayments and break costs when they apply.
- Fixed versus variable and what happens at the end of a fixed term (usually a revert rate).
Understanding the Broker’s Proposal
Issue a Credit Assistance Quote before lodgement. If a cheaper or more suitable option reduces commission, keep the loan that still fits the client.
- Loan type, amount, term, rate type, comparison rate, fees and the commission method.
- Show in dollars how the repayment changes if the rate rises.
Post-Consultation Steps
Broker’s Analysis
After the meeting:
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- Re-run the calculator on the live policy and write the recommended options.
- Lodge and own the application process, including valuation and conditions.
Give the Client the Comparison in Writing
The client should leave the consultation with these details in writing:
- They have seen more than one suitable option when the panel has more than one.
- They can see the dollar gap between rates and the calculation behind any savings claim.
- They can explain the loan terms back to you before they sign.
Formal Application and Approval
To lodge:
- Submit the full evidence list the lender named.
- Track each condition until unconditional approval. Conditional approval is still not a settlement date.
Issues and Complaints
Use your internal dispute file first. If that does not close it, the client can go to the Australian Financial Complaints Authority (AFCA). Keep the Credit Guide, the quote and the fact-find in that file.
Questions, Loan Types and Credit Scores
Questions to Ask Your Broker
Answer these without waiting to be asked:
- How you are paid, including trail and any borrower fee.
- Why these loans beat the next suitable option on the panel.
- The total fees on each option, including LMI when LVR is above the lender’s uninsured line (commonly 80%).
Long-term Planning
Ask what the client will do at the end of a fixed term and if they expect to sell or refinance inside a clawback window. After-sales personal financial advice still needs an AFSL or a referral. A home-loan recommendation stays credit assistance.
Understanding Different Types of Mortgages
Fixed-Rate Mortgages
A fixed-rate mortgage in Australia usually fixes for 1 to 5 years, then moves to the lender’s revert rate. Break costs can apply if the client exits early. Do not promise that a cash-rate hold will match the revert rate.
Variable-Rate Mortgages
Variable-rate mortgages follow the lender’s SVR and any discount. Extra repayments and offset are usually easier here. Serviceability still uses the current APRA buffer of 3 percentage points for ADIs unless a later notice changes it.
Interest-Only Mortgages
Interest-only terms sit on the lender sheet. Many owner-occupier lines now cap IO at about 5 years. Some investor lines still quote longer. At the end of IO the client pays principal and interest on the remaining term. Explain the repayment change and keep any personal tax advice with the client’s registered tax agent.
Split Mortgages
A split mortgage puts part of the balance on fixed and part on variable. Write both rates, both comparison rates and the break-cost risk on the fixed slice. A split does not remove the serviceability buffer.
How Credit Scores Affect Mortgage Decisions
How Your Credit Score Affects Your Mortgage
Lenders use the score as one input. A higher score helps pricing and policy. A clean score does not override failed serviceability or a security the lender will not take. Pull the report in the consultation if the client has not.
Tips for Improving Your Credit Score
If the file is not ready, give the client a short list and book a return date:
- Pay the debts that already appear on the bureau, on time.
- Reduce card limits you will not need. High utilisation still hurts some score models.
- Stop extra credit enquiries before lodgement.
- Pull each bureau’s free report and dispute a genuine error in writing.
- Check the bureau help page before advising a client to close a clean old card, because account age may affect the score.
A complete consultation file includes the Credit Guide, fact-find and Credit Assistance Quote before lodgement.
