Going Direct to a Bank vs Using a Broker: Which Is Better?

Many borrowers wonder whether they should just talk to their bank instead of using a broker. Here are the key differences:

Direct bank loan

• Limited product range:  Banks can only offer their own mortgage products. If you don’t fit their policies, your application may be declined and your credit file will show an inquiry.

  
  

• Negotiation is up to you:  You must negotiate rates, fees and loan features yourself. Without expert knowledge, you may miss potential savings.

  
  

• Time consuming:  You’ll need to research, compare and lodge applications yourself, often juggling calls during business hours.

  
  

Broker‑assisted loan

• Wider choice of lenders:  Brokers compare dozens of lenders and know which ones accept unusual employment types, non‑traditional deposits or higher loan‑to‑value ratios. Because they handle about three‑quarters of new loans mfaa.com.au, brokers understand the nuances of various lenders.

  
  

• Convenience:  Brokers do the paperwork, follow up with lenders and keep you informed. They can meet outside office hours and are paid by the lender (via commissions) in most cases. Moneysmart explains that brokers must tell you if they receive different payments for loans from different lenders moneysmart.gov.au.

  
  

• Better outcomes:  Brokers work for you, not the bank. They must act in your best interests and may negotiate lower interest rates or fee discounts that individual borrowers cannot access.

  
  

If you have a straightforward situation and strong loyalty to your bank, going direct might work. But if you want more choice, competitive rates and someone to guide you through complex policies, a broker offers significant value.