Money
Who pays the broker, and when
On a standard residential home loan you usually pay the broker nothing directly. That does not mean the arrangement is invisible — it means the payment comes from the lender, on a schedule worth understanding, because it is disclosed to you anyway and it shapes incentives in ways that are mild but real.
Upfront commission
A one-off payment from the lender to the broker's aggregator when a loan settles, calculated as a percentage of the loan amount.
Paid by
The lender, not you directly
Worth knowing
It scales with loan size. That is not sinister, but it is worth knowing when someone is relaxed about you borrowing more than you planned.
Trail commission
An ongoing annual payment from the lender for as long as the loan stays open, calculated on the outstanding balance.
Paid by
The lender, not you directly
Worth knowing
It creates a mild interest in the loan staying where it is. A good broker will still reprice or refinance you; it is simply a question worth asking directly.
Clawback
If the loan is discharged within a set period — often the first two years — the lender reclaims some or all of the upfront commission from the broker.
Paid by
The broker, back to the lender
Worth knowing
Some brokers pass clawback on to the client through their agreement. Read what you sign, and ask directly whether a clawback clause applies to you.
Fee for service
A fee charged directly to you, more common in commercial, complex or specialist cases where the commission does not cover the work.
Paid by
You
Worth knowing
Entirely legitimate, and it must be disclosed in writing before you commit. What matters is knowing whether it is instead of, or in addition to, commission.
What you are entitled to see
A credit guide and a credit proposal disclosure set out who the broker is, what they are authorised to do, the lenders they work with, and the commissions payable on the loan being recommended. These are documents you receive as a matter of course. Read the commission section and the clawback section; they are short, and they are the two parts that most often surprise people later.
Moneysmart — using a mortgage broker (ASIC)
General information about how mortgage broking works in Australia and what applies in Sydney. Licensing and complaints arrangements are administered by ASIC and AFCA; duty and concessions by Revenue NSW. Each page links to the body that sets the rule. Reviewed 17 August 2026.