To negotiate with lenders as a broker, send the business development manager (BDM) a complete client scenario and ask for a written pricing or policy exception. Attach a genuine competing offer where you have one. Secure the terms in writing before lodgement, then check the approval against them.
A mortgage negotiation strategy starts with an assessable file. The Reserve Bank of Australia’s cash-rate table gives the market reference, while each lender sets its own rates and exception rules.
Pre-Negotiation Preparation
Decide exactly what you want changed before contacting the BDM. A rate reduction, fee waiver, lenders mortgage insurance (LMI) loading and policy exception each need a different justification.
- Obtain the client’s consent and review the credit report. Equifax scores run from 0 to 1200. Read Experian’s score against the scale on its report. Experian has combined the information previously held by illion and Experian into one report.
- Resolve genuine errors through the reporting body before relying on the file. A client can obtain a free credit report every three months. Use the report to understand conduct as well as the score.
- List the client’s debts and available credit limits, including cards, Australian Taxation Office debt and HECS/HELP obligations. Reconcile the bureau information with statements and the client’s explanation.
- Run repayment capacity through the lender’s own calculator using its assessment rate. APRA’s APS 220 Credit Risk Management requires a serviceability buffer of at least 3 percentage points for banks’ residential mortgage lending, unless APRA determines otherwise. A pricing request does not establish eligibility for a serviceability exception.
- Compare at least two lenders that can assess the same scenario. Record the loan-to-value ratio (LVR), repayment type, rate, fees and features on the same basis.
Use the current product schedule and panel policy information. Compare package fees and offset access alongside the rate. An annual package fee can outweigh a small rate saving on a low balance.
Write your acceptable range before the call. Record the preferred rate, the highest total cost the client accepts and any condition that rules out the lender. Include the settlement deadline and the lender’s capacity to meet it.
For the role of a credit score in the pricing discussion, see how brokers assess credit scores. Use the lender policy guides for lender-specific requirements.
Negotiation Strategies
Send a one-page BDM email with enough evidence for the lender to decide the exact exception. Put the requested decision near the start so the BDM can identify who must approve it.
The email needs the following information.
- The loan amount, purpose and LVR, with the valuation basis.
- Employment and verified income, including any self-employed evidence the lender requires.
- Genuine savings and their source, plus the serviceability result and material debts.
- The competing lender’s written offer, its conditions and expiry, if available.
- The exact rate or fee waiver requested, or the policy rule requiring an exception.
- The settlement deadline and the evidence supporting the borrower’s repayment conduct.
For a hypothetical pricing request, state that the client meets the lender’s standard policy and attach the other lender’s offer. Ask for a specified rate and package-fee treatment. Request confirmation of any conditions and how long the exception remains available.
Never invent a competing number. If another lender cannot accept the client’s employment or security, explain that difference when presenting its price. A rate from an unsuitable product is a weak basis for an exception.
Do not lodge on a verbal discount. Ask the BDM to confirm the rate, relevant fees and conditions in writing. Keep a policy exception separate from pricing approval so that approval of one cannot be mistaken for approval of both.
If the BDM declines, ask which rule or evidence prevents approval. Supply a missing document or revise the ask within the client’s acceptable range. When the decision requires credit authority, request escalation through the lender’s documented process.
Choose the lender on the client’s needs and total costs. ASIC’s RG 273 Mortgage brokers: Best interests duty explains the obligations that continue to apply after you secure a discount.
Legal and Documentation Essentials
Read the contract against the approval and written exception before the client signs. Check the rate type, revert rate, package fee, LMI treatment and any condition attached to the exception.
Save the BDM’s reply with the comparison and the evidence supporting your recommendation. If the lodged rate or fee differs, stop and obtain a correction before formal approval. If the contract still differs, resolve the discrepancy before signing.
Refer commercial, self-managed super fund (SMSF) or guarantee structures to the licensee’s credit team. Send legal questions to the client’s solicitor. Explain the credit terms within your authority and leave legal interpretation to an appropriately qualified adviser.
Walk the client through the repayment schedule and any break-cost provisions. Record what they accepted, including a fee the lender refused to waive. Keep the written exception with the final documents so a later review can establish what applied.
Performance Monitoring and Ongoing Negotiations
Diarise fixed-term expiry and the end of any retention offer. Treat each review as a new assessment of the client’s circumstances and the lender’s current policy.
Refresh the income, expenses and debt information needed for that review. Run the relevant serviceability assessment before promising a new loan outcome. A previous exception gives you a record of the decision, not an entitlement to repeat it.
Track My Trail’s Refinance Finder helps organise reviews from each loan’s settlement date. Its review queue is ordered by settlement age and balance, and reviewed loans return to the queue after 90 days. Keep fixed-term and offer-expiry reminders in your client workflow as well.
Send the written exception or refusal to the client on the same day you receive it. Explain the next action and any offer expiry. If the lender refuses a request, compare the remaining options before the competing offer expires.
When changing lenders is the appropriate way to reset the price, use the client refinance timing guide. Keep the retention negotiation and the refinance recommendation documented as separate decisions.
Building Long-Term Relationships With Clients
Explain that an exception applies to this client file only. The negotiated terms do not become the lender’s published offer for other borrowers.
Name the fee that could not be waived and show how it affects the comparison. Confirm the terms the lender actually approved before the client relies on them. Give the client the written decision so they can see the conditions.
Keep the conversation within credit assistance. You can discuss the client’s income and expenses to assess a loan. Personal advice about investments or an SMSF strategy requires the relevant Australian financial services licence authority.
ASIC’s SMSF licensing guidance distinguishes credit assistance from financial product advice. Refer investment-strategy questions to an adviser with the required authority and retain the referral on the file.
Expanding Your Network and Staying Informed
Ask BDMs which exception grid or credit overlay has changed and what evidence the lender now needs. Keep the answer with the relevant policy notes so your next request uses the right criteria.
Mortgage & Finance Association of Australia (MFAA) and Finance Brokers Association of Australia (FBAA) membership is optional for ASIC purposes. A lender, aggregator or licensee can impose its own membership requirements. Association membership is separate from Australian Financial Complaints Authority membership obligations.
Spend continuing professional development on the lender overlays you negotiate most, such as self-employed income or construction lending. Review a declined exception with the BDM and record the reason before the next similar file.
Before the next pricing email, use the RBA cash-rate table and refresh the panel matrix. Confirm the lender’s policy and the evidence for the exact ask, then obtain its decision in writing.
