Mortgage broker fees can include a client fee alongside lender commission. For consumer credit assistance, agree the fee in a written quote before providing the assistance.
Most residential files pay the broker through lender commission. Tell the client whether they will pay you directly, what the fee covers and when it becomes payable.
How Brokers Are Paid on a Residential File
Lenders usually pay residential brokers an upfront commission around settlement and ongoing trail while the loan remains with the lender. The aggregator agreement determines the broker’s share.
Older upfront figures of 0.65% to 0.70% of the loan amount plus GST are illustrations only. On a hypothetical $500,000 loan, that means $3,250 to $3,500 plus GST before the aggregator split.
Older trail figures of 0.165% to 0.275% a year plus GST are also illustrations. On a hypothetical $400,000 remaining balance, that means $660 to $1,100 plus GST a year before the split.
Use the live aggregator grid for the lender and product, including its balance calculation and offset treatment. Best interests duty ranks the product by the client’s interests, not the pay line.
When a Broker Can Charge the Client a Fee
A client fee can pay for work that lender commission does not cover. Small loans and complex files can involve enough work to make a separately quoted fee necessary.
For example, a small loan can produce less upfront commission while requiring much the same work as a larger application. Commercial files can also involve a fee, although their consumer-credit coverage depends on the transaction.
For consumer credit assistance, section 114 of the National Consumer Credit Protection Act 2009 requires a written quote accepted before the assistance. Give the client a copy of the accepted quote.
The written credit quote must describe the services and the maximum amount payable. Explain when the fee applies, its GST treatment and whether payment is due if the loan does not proceed.
The no-fee exemption in regulation 28C removes the quote requirement when its disclosure conditions are met. State in the Credit Guide that you charge no fee, or record the no-fee position in the proposal disclosure as the regulation permits.
Early discharge can trigger lender clawback against the broker. Regulation 28VG prevents passing that clawback to the consumer as a charge caused by the repayment obligation.
A separately agreed service fee must stand on its own terms. Read how mortgage broker commission clawback works before explaining an early repayment.
Disclosing Fees and Commission in Writing
The Credit Guide, fee quote and credit proposal disclosure serve different purposes. Give each document at the stage its rules require.
- Give the Credit Guide as soon as practicable once credit assistance is likely. Include your authority and contact details, dispute process, fees and commission information. Name the six lenders you do most business with, or all lenders if you use six or fewer.
- Before providing fee-bearing credit assistance, give the written quote and obtain the client’s acceptance. The client signs and dates it, and receives a copy. Keep the maximum fee and payment conditions beside the services covered.
- Give the credit proposal disclosure when you provide credit assistance. Show the total client fees and their calculation, reasonable commission estimates and the relevant lender and third-party application costs.
Sections 113, 114 and 121 of the National Consumer Credit Protection Act 2009 set the core requirements. Section 122 also prevents marking up a third-party payment when seeking reimbursement from the client.
Use the mortgage broker fee agreement template to document a client fee. The Credit Guide requirements explain the guide’s content separately.
Commission Conflicts and Best Interests
Disclosed lender commission can lawfully pay for broking, while the recommendation must still meet the client’s interests. Disclosure alone does not resolve a conflict.
Rank the available products by the client’s needs and costs. Record why the chosen loan fits, including when another product would pay you more commission.
Use reasonable estimates for future commission in the disclosure documents and explain the calculation. The Credit Guide’s commission information can use the permitted request-based disclosure approach under the regulations.
For trail paid in instalments, regulation 28H permits a reasonable estimate of the highest instalment in the proposal disclosure. State the assumptions and express the estimate as the regulations require.
ASIC’s disclosure overview explains these document rules and exemptions. Use the actual lender grid to calculate the estimate for the file.
Preparing the Client Before the Meeting
Send the client a pack with your Credit Guide and an explanation of any proposed fee before the appointment. Obtain acceptance of a required quote before the meeting reaches credit assistance.
Check your entry on the Australian Securities and Investments Commission (ASIC) professional registers. A broker must hold an Australian credit licence or act under the appropriate credit representative authority.
The licensee uses form CL30 to notify ASIC of a credit representative appointment under section 71. CL50 is the licensee’s annual compliance certificate.
Association member lists are directories, not credit authority.
Record the client’s requested loan amount and term, then their preferred rate type and features. Include offset or redraw when it meets their needs, and record the reason.
Questions to Answer During the Meeting
Volunteer the fee and commission information before asking the client to choose a loan. Cover these points in the conversation and the written documents.
- Explain which lenders you can use for this file and any restriction that affects the choice.
- Describe the upfront and trail commission method, including the aggregator split and who receives each payment.
- Identify any client fee and other costs, including a valuation charge where applicable.
- Provide the written fee quote before credit assistance, explain its maximum charge and payment conditions, and obtain acceptance.
Compare suitable options by the client’s cost and required features. Keep the reason for the recommendation with the fee disclosures in the client file.
Complaints About Fees
Start a fee complaint in your internal dispute resolution file and retain the Credit Guide, accepted quote and commission disclosure. If it remains unresolved, explain the Australian Financial Complaints Authority (AFCA) path using the guide to mortgage broker complaints and AFCA.
A Fee Checklist for Borrowers
Give the client this checklist with the meeting pack so they can review your fees themselves.
- Check the broker’s licence or credit representative authority on ASIC’s registers. Read reviews as separate evidence of service.
- Ask for all fees upfront, including the lender commission and any direct client fee. Accept the written fee quote before credit assistance begins.
- Ask how ongoing trail works and what service the broker provides after settlement. Review loan costs when circumstances change, even if refinancing ends the broker’s trail.
Tools That Support Fee Disclosure
Keep the aggregator commission file beside the client fee record. Retain the schedule used for each estimate so the calculation can be explained later.
Track My Trail’s Commission Verification matches each upfront payment to the trail expected within two months. It also shows trail that arrives without an upfront payment, helping you investigate differences in your commission records.
A borrowing-capacity or repayment calculator supports the loan discussion. Set the broker fee from the agreed services and use the aggregator schedule for commission.
A video meeting needs the same document timing as an in-person appointment. Send the Credit Guide beforehand, obtain any required quote acceptance before credit assistance and retain the meeting notes.
Print this month’s live aggregator grid beside the next quote. Match the commission estimate and fee terms to the file before you provide the assistance.
