You’ve found a place you love, calculated 17 versions of your renovation budget, and now you’re staring down the big question: where on earth do I get the home loan? Do you walk straight into a bank and talk to whoever is on duty, or do you work with a mortgage broker who compares options for you?
Both paths can get you a mortgage. But they don’t work the same way, they don’t give you the same experience, and they don’t always lead to the same long-term cost. Choosing between a bank and a mortgage broker is less about “which is better for everyone” and more about “which is better for you right now.”
Let’s break it down in plain English, with as little jargon and as many honest trade-offs as possible.
What Is a Mortgage Broker, Really?
A mortgage broker is essentially a home loan matchmaker. Instead of representing just one bank, a broker usually works with a panel of lenders. Their job is to understand your situation, pull up multiple loan options, and help you decide which one suits your needs best.
Unlike a bank officer, a mortgage broker is not tied to a single product range. They can say, “Bank A has the lowest rate, but Bank B has a shorter lock-in and better terms for partial repayment.” In other words, they’re comparing the menu, not just promoting the house special.
Most mortgage brokers are paid by the bank via commission when your loan is successfully approved and disbursed. In many markets, that means you don’t pay them directly. The catch? You want to make sure your broker is recommending what’s best for you, not just what pays them the highest commission. That’s where asking smart questions and checking more than one option becomes important.
What Happens When You Go Direct to a Bank?
Going directly to a bank means dealing with the lender one-on-one. You sit down with a relationship manager or home loan specialist, and they explain the packages that their bank is offering. You get information from the source, which can be reassuring.
The advantage here is simplicity. You know exactly who you’re dealing with, you keep your accounts and home loan in one place, and you may qualify for relationship perks such as fee waivers or bundled products. If you already love your bank’s mobile app, card rewards and service, staying in the ecosystem can feel very safe.
The drawback is that you are seeing one slice of the market at a time. If you only speak to one bank, you have no idea whether their rates are competitive or whether their lock-in period is unusually harsh compared with others. You can visit multiple banks yourself, of course, but then you become your own mortgage broker – just without the industry tools and shortcuts.
Comparing Choice: One Menu vs a Buffet
When it comes to range of options, a mortgage broker usually wins. Because they work with multiple lenders, they can show you several packages at once and highlight the quirks of each. This is especially handy if you:
- Have unique income (self-employed, multiple side gigs, commission-based).
- Are buying a more complicated property, such as an investment or second home.
- Want to compare fixed, floating and hybrid options side by side.
A bank, on the other hand, will give you deeper detail on their own products, but that’s where the menu ends. You’ll get a good understanding of how their packages work, but if you want to know whether another bank’s offer is genuinely better, you’ll have to find out yourself.
If you enjoy shopping around and comparing, you can replicate what a broker does by visiting several banks. Just be prepared for repeated forms, repeated conversations and a lot of “give us some time and we’ll get back to you.”
Comparing Cost: Do You Pay More Through a Mortgage Broker?
This is one of the biggest questions people have: “If I use a mortgage broker, am I secretly paying more?” In many markets, the answer is no. Brokers are typically paid by the bank, and the rate you get through a broker is often the same or better than if you walked in alone. Banks price broker channels into their marketing strategy, not as an add-on fee to you.
That said, there are a few nuances you should watch for. Some brokers may charge a direct fee in special or complex cases, such as highly unusual income profiles or tricky structures. If that’s the case, they should clearly tell you upfront what you’re paying for and why.
When comparing refinance or new loan offers, don’t assume the bank is automatically cheaper because you skipped the broker. Instead, compare total cost: interest rate over a few years, lock-in penalties, legal subsidies, valuation fees, and any clawback terms. The winner is the one that gives you the best combination of rate and flexibility, not just the lowest number on the brochure.
Comparing Time and Effort: Who Does the Heavy Lifting?
If you have a busy life (and who doesn’t?), one of the biggest advantages of a mortgage broker is time saved. Instead of contacting five banks, explaining your life story five times and tracking five sets of documents, you do it once with the broker. They then gather quotes, clarify terms and help you shortlist.
A good mortgage broker also helps you package your application in the best possible light. They know which banks are more flexible with certain industries, which ones dislike certain types of loans, and how to present your income documents clearly. That can be the difference between “Let us get back to you” and “Approved.”
Going direct to a bank means you handle the admin yourself. If you enjoy control, this might suit you. But if your day is already overflowing with work, family and a social life, delegating some of the legwork to a broker can be a very rational decision, not laziness.
Transparency and Trust: Who’s Really on Your Side?
Let’s be honest: no one in the mortgage process works for free out of pure kindness. Banks want profitable customers. Mortgage brokers want successful deals. Your job is to align incentives so that what’s good for them is also good for you.
With a bank, the conflict of interest is obvious: their job is to convince you their products are good. They might still give you honest advice, but they can’t turn around and say, “Actually, another bank is better for you.” That conversation simply isn’t part of their job description.
With a mortgage broker, the potential conflict is more subtle. Different banks may pay different commission levels, and not every broker handles that perfectly. That’s why you should ask questions like:
- How many banks are on your panel?
- Will you show me more than one option?
- Do you earn different commissions from different banks?
- Why are you recommending this package over the others?
A trustworthy broker will welcome these questions and be comfortable explaining their logic. If they get cagey or defensive, that’s a red flag.
Who Should Use a Mortgage Broker?
A mortgage broker is often a good choice if you:
- Are a first-time buyer who feels overwhelmed by home loan jargon and wants guided comparison.
- Have non-standard income (freelancer, business owner, multiple streams) and need help finding a bank that understands your profile.
- Are refinancing and want to scan the wider market quickly instead of doing a bank tour.
- Value convenience and explanation more than the thrill of DIY rate hunting.
If this sounds like you, a mortgage broker can act as translator, negotiator and project manager rolled into one. You still make the decisions, but someone else curates the options and handles much of the paperwork.
Who Might Prefer Going Direct to a Bank?
Going straight to a bank can be a perfectly good choice if you:
- Already have a strong relationship with a bank and trust their service.
- Are confident comparing home loans on your own and enjoy the DIY approach.
- Have a very simple, straightforward profile and just want a decent, no-drama package.
- Prefer to keep everything under one financial “roof” and take advantage of bundled perks.
For some people, dealing with one institution they know well feels safer than adding another middle layer. If you like the clarity of “I deal with Bank X and that’s it,” then going direct may align better with your personality.
How to Decide: Simple Questions to Ask Yourself
If you’re still torn between a bank and a mortgage broker, try these questions:
- How much time do I realistically want to spend on this?
If your answer is “as little as humanly possible,” a broker is likely your friend.
- Do I enjoy comparing numbers and reading fine print?
If yes, you may do well talking to banks yourself. If no, a broker’s explanations will be valuable.
- Is my income or property situation straightforward or messy?
The messier it is, the more a mortgage broker’s experience across banks can matter.
- Do I care more about one trusted brand, or about seeing the wider market?
If brand comfort wins, you may lean bank. If breadth wins, you may lean broker.
There is no universally right answer. The “best” path is whichever gives you a competitive loan and lets you stay sane during the process.
Can You Use Both?
Here’s a secret: you don’t have to marry one approach forever. You can talk to a mortgage broker and a bank or two directly. Use the broker to understand the landscape and benchmark packages, then see how your favourite bank compares. Or start with your bank’s offer and ask a broker if there’s anything better out there.
The key is to be transparent. Let your broker know you’re also checking direct offers. Let your bank know you’re comparing. That gentle competitive pressure often encourages everyone to put their best offer forward – and that’s good for you.
The Bottom Line: Choose the Partner That Fits Your Style
At the end of the day, both routes can get you a perfectly good home loan. A bank gives you simplicity and brand familiarity. A mortgage broker gives you choice, guidance and time savings. The right option depends on your comfort with complexity, your schedule and how personalised you want the advice to be.
If you want a curated, hand-held experience across multiple lenders, a mortgage broker is likely your best ally. If you prefer a direct relationship with a single institution and don’t mind doing your own homework, going straight to a bank can work just fine.
Either way, remember this: your mortgage is a huge, long-term commitment. It deserves more thought than “whatever the first person offered me.” Whether it’s a broker or a banker sitting across the table, make sure they can explain the loan clearly, show you the alternatives, and help you choose something that supports your life – not just their sales target.